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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
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October 31, 2019
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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CIEN
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New York Stock Exchange
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Page
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our ability to execute our business and growth strategies;
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fluctuations in our revenue, gross margin and operating results and our financial results generally;
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the loss of any of our large customers, a significant reduction in their spending, or a material change in their networking or procurement strategies;
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the competitive environment in which we operate;
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market acceptance of products and services currently under development and delays in product or software development;
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lengthy sales cycles and onerous contract terms with communications service providers, Web-scale providers and other large customers;
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product performance or security problems and undetected errors;
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our ability to diversify our customer base and to broaden the application for our solutions in communications networks;
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the level of growth in network traffic and bandwidth consumption and the corresponding level of investment in network infrastructures by network operators;
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the international scale of our operations;
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fluctuations in currency exchange rates;
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our ability to forecast accurately demand for our products for purposes of inventory purchase practices;
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the impact of pricing pressure and price erosion that we regularly encounter in our markets;
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our ability to enforce our intellectual property rights, and costs we may incur in response to intellectual property right infringement claims made against us;
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the continued availability, on commercially reasonable terms, of software and other technology under third-party licenses;
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the potential failure to maintain the security of confidential, proprietary or otherwise sensitive business information or systems or to protect against cyber attacks;
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the performance of our third-party contract manufacturers;
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changes or disruption in components or supplies provided by third parties, including sole and limited source suppliers;
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our ability to manage effectively our relationships with third-party service partners and distributors;
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unanticipated risks and additional obligations in connection with our resale of complementary products or technology of other companies;
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our exposure to the credit risks of our customers and our ability to collect receivables;
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modification or disruption of our internal business processes and information systems;
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the effect of our outstanding indebtedness on our liquidity and business;
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volatility and uncertainty in our stock price, the capital markets and our ability to access the capital markets to raise capital;
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unanticipated expenses or disruptions to our operations caused by restructuring activities;
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our ability to attract and retain experienced and qualified personnel;
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disruptions to our operations caused by strategic acquisitions and investments or the inability to achieve the expected benefits and synergies of newly-acquired businesses;
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our ability to commercialize and grow our software business and address networking strategies including software-defined networking and network function virtualization;
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changes in, and the impact of, government regulations, including with respect to: the communications industry generally; the business of our customers; the use, import or export of products; and the environment, potential climate change, and other social initiatives;
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future legislation or executive action in the U.S. or foreign countries relating to trade regulation, including the imposition of tariffs and duties;
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the impact of the Tax Act, changes in tax regulations and related accounting, and changes in our effective tax rates;
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the write-down of goodwill, long-lived assets, or our deferred tax assets;
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our ability to maintain effective internal controls over financial reporting and liabilities that result from the inability to comply with corporate governance requirements; and
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adverse results in litigation matters.
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Cloud-Based Services. Enterprises and consumers continue to replace locally-housed computing and storage by adopting a broad array of innovative cloud-based models – including Platform as a Service (PaaS), Software as a Service (SaaS) and Infrastructure as a Service (IaaS) – and an expanding range of cloud-based services that host key applications, store data, enable the viewing and downloading of content and utilize on-demand computing resources.
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Over-the-Top (“OTT”) Services and Video Streaming. OTT content refers to video, multimedia and other applications provided directly from the content source to the viewer or end user across a third-party network. Traffic from streaming and OTT services, including high definition and ultra-high definition video, has expanded with the increased availability of, and end-user demand for, video content accessible through a variety of devices and media.
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Mobile Traffic and Applications. Traffic from mobile web applications, including video, internet and data services, has expanded with the proliferation of smartphones and other wireless devices. Because much of wireless traffic ultimately travels across a wireline network to reach its destination, growth in mobile communications continues to place demands upon wireline networks, including the backhaul and fronthaul portions of networks emanating from cell sites.
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5G Mobile Networks. Fifth-generation wireless broadband (“5G”) technology is expected to drive meaningful increases in bandwidth and performance, enabling emerging applications and services that 4G/LTE networks cannot support. To fully capitalize on these opportunities, network operators will need to consider the demands 5G technology will place on their wireline infrastructures.
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Fiber Deep. Fiber deep is a network densification initiative by cable and multiservice operators that seeks to push more digital fiber-closer to the end-user and to increase potential bandwidth, computing capability and data speeds to homes and enterprises, while at the same time decreasing power, space and operating costs.
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Internet of Things (“IoT”). As networked connections between devices and servers grow, machine-to-machine-related traffic (“M2M”) is expected to represent an increasing portion of traffic. These connections allow sharing of data that can be monitored and analyzed, including in smart grid applications, health care and safety monitoring, resource and inventory management, home entertainment, consumer appliances, connected transportation and other M2M data applications.
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Ultra-High Definition Video (“UHD”) and Virtual Reality (“VR”) and Augmented Reality (“AR”). UHD video and the advent of immersive technologies like VR, AR and 360° video are likely to place further capacity and capability demands on networks as adoption of these technologies grows. Consumer electronics industries are rapidly advancing these technologies and making them more widely available and affordable to consumers.
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Edge Computing. Immersive cloud services and gaming using AR and VR technologies require a low latency environment to provide the required user experience. We expect network operators to increase the number and
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Machine Learning (“ML”) and Artificial Intelligence (“AI”). As broad foundational technologies that increase network intelligence and improve automation, ML and AI enable improvements in network planning, operations, user experience and trouble resolution. Adoption of these technologies, expected to continue to increase as the IoT expands and additional services are created, can be expected to be a driver of further network traffic and solutions innovation.
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Closed Loop Automation. Network operators are seeking to reduce network operating costs and better leverage analytics, automation and control capabilities to automate end-to-end service creation and delivery. Closed loop automation is a continuous cycle of communications between the network hardware infrastructure and software elements to analyze network conditions, traffic demands, and resource availability and to determine the best placement of traffic for optimal service quality and resource utilization.
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Software-Defined Networking (“SDN”). SDN seeks to simplify networks to create more open environments that ease management, support automation and quickly deliver customized services to end users, by enabling individual network elements to be directly programmable by standards-based software control. This results in end-to-end visibility of network flows, enabling the optimization of traffic paths and the control of data flows through a network.
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Network Function Virtualization (“NFV”). NFV is the separation of network services or capabilities from the physical network assets that traditionally provide these services or capabilities to end users. Network operators are increasingly looking for solutions like NFV, which enables network functions through software that runs on industry-standard servers and network and storage platforms, in order to reduce their dependence on single-purpose hardware and accelerate the time to market for new revenue-generating services.
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a fully integrated hardware solution from one vendor with the separate use of a network operator’s own software or another vendor’s SDN-based control;
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integrated photonic line systems with open interfaces from one vendor and the separate or “disaggregated” procurement of modem technology from a different vendor; and
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open source software in concert with or as an alternative to integrated, proprietary third-party software solutions.
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Communications Service Providers. Our communications service provider customers, including regional, national and international wireline and wireless carriers, form our historical customer base and represent a majority of our revenue.
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Web-scale Providers. Our “Web-scale” provider customers – also often referred to in the market as hyper-scale providers – include internet content providers and providers of internet services and infrastructure including data centers, cloud networking, storage infrastructure and web hosting services. These providers are focused on applications such as search, social media, video, real-time communications and cloud-based service offerings, as well as other emerging network services. As significant purchasers of capacity on submarine networks and from communications service providers on a global basis, these customers can also influence networking solution alternatives by those network operators.
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Cable and Multiservice Operators (MSO). Our customers include regional, national and international cable and multiservice operators.
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Submarine Network Operators. Our customers include service providers, Web-scale providers and consortia operators of submarine communications networks across the globe.
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Enterprises. Our enterprise customers include large, multi-site commercial organizations, including participants in the financial, health care, transportation, utilities, energy and retail industries.
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Government, Research and Education. Our government customers include federal and state agencies in the United States as well as international government entities. Our research and education customers include research and education institutions around the world, as well as communities or consortia, including leaders in research, academia, industry and government.
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Multi-Domain Service Orchestration (MDSO). Network infrastructures are comprised of multiple technology layers and domains – such as the data center, cloud, metro, access and core networks – and it is often complex for network operators to offer end-to-end services in this environment. Blue Planet enables service orchestration across multiple
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Inventory (“BPI”). By integrating or “federating” data from multiple inventory systems and presenting it in a single dynamic view, BPI allows real-time visibility into the topology and status of network and service resources from end to end. Integrating with legacy operation support systems (“OSS”), BPI helps network providers simplify key operational processes such as service fulfillment, network planning and service assurance.
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Route Optimization and Analysis (“BP ROA”). BP ROA combines routing, traffic and performance analytics for real-time monitoring of IP services across the cloud. These capabilities enable troubleshooting of latent or transient network problems and modeling to predict the impact of network infrastructure, service and workload changes to build more resilient networks.
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NFV Orchestration (“NFVO”). Blue Planet provides NFV management and orchestration capabilities for creating and managing virtualized network functions and data center resources. NFVO uses an open, vendor-agnostic approach that allows network operators to select and scale those virtual network functions (VNFs) they wish to offer to customers.
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Unified Assurance & Analytics (“UAA”). UAA leverages multi-layer/multi-domain assurance and AI-powered analytics to provide insights into the health and performance of network resources and services, ensuring an end customer quality-of-experience and availability to meet dynamic service demands.
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Blue Planet Services. To complement our software portfolio, we offer a range of related services that include professional services for solution customization and OSS integration, software and solution support services, consulting and design, and technical support relating to our software offerings. These services are focused on enhancing network automation and network analytics, enabling multi-vendor integration and support, and implementing programmable multi-domain next-generation networks.
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Manage, Control and Plan (“MCP”). MCP software provides SDN-based domain control of our next-generation packet and optical networks, unifying fault, configuration, accounting, performance and security (FCAPS) management of our multi-layer network infrastructure, with service management and online network planning. MCP integrates with and simplifies network operators’ business processes and lifecycle operations – including equipment commissioning, service provisioning, assurance and performance monitoring.
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OneControl Unified Management System. OneControl is an integrated network and service management solution that supports certain of our Networking Platform products. OneControl offers end-to-end service creation, activation and assurance, and visualization of performance information for network health status. OneControl enables management functions, including network inventory, network element configuration backup, software delivery and security administration.
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Platform Software Services. To complement our Platform Software portfolio, we offer a range of related services that include software subscription services, consulting, network migration and integration, installation and upgrade support services, and technical support relating to our Platform Software offerings. These services are focused on enabling our customers to operate their Ciena networks most efficiently, and to modernize their operations.
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Build. Services that ensure proper planning, design, installation, deployment and implementation of communications networks;
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Improve. Services that maintain and support network infrastructures and consulting and network design services to enhance network performance or migrate to next generation infrastructures; and
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Operate. Services that maintain or monitor network infrastructure operations.
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Reinforcing our coherent optical leadership with continued development that advances reach, transmission speed and spectral efficiency, while minimizing power usage, space and network element requirements;
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Executing on parallel innovation paths for the next generation of our modem technology – WaveLogic 5 Extreme (WL5e) and WaveLogic 5 Nano (WL5n) – to address customer requirements ranging from integrated systems to pluggable form factors;
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IP/Ethernet-based Packet Networking solutions to support mobile network traffic and network densification initiatives, such as 5G and fiber deep;
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Converging packet-based IP and optical network infrastructure to improve network economics and scale, and to enable new services;
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Pursuing pluggable and optical module development initiatives to support our optical microsystems business;
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Migrating legacy services to next-generation packet infrastructures;
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Advancing our software-based domain control, automation and analytics with MCP; and
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Integrating the organic and acquired elements of our Blue Planet Automation Software to enable closed loop automation.
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the ability to meet business needs and drive successful outcomes;
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functionality, speed, capacity, scalability and performance of network solutions;
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price for performance, cost per bit and total cost of ownership of network solutions;
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incumbency and strength of existing business relationships;
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ability to offer comprehensive networking solutions, consisting of hardware, software and services;
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time-to-market in delivering products and features;
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technology roadmap and forward innovation capacity;
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company stability and financial health;
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flexibility and openness of platforms, including ease of integration, interoperability and integrated management;
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ability to offer solutions that accommodate a range of different consumption models;
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operating costs, space requirements and power consumption of network solutions;
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software and network automation capabilities;
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manufacturing and lead-time capability; and
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services and support capabilities.
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ensuring competitive, fair and transparent compensation and innovative benefits offerings;
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supporting the overall well-being of our employees from a physical, emotional, financial and social perspective;
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creating opportunities for employee growth, development, recognition, training and education; and
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promoting an inclusive and diverse workplace, where all individuals are respected and feel they belong regardless of their age, race, national origin, gender, religion, disability or sexual orientation.
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Name
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Age
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Position
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Patrick H. Nettles, Ph.D.
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76
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Executive Chairman of the Board of Directors
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Gary B. Smith
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59
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President, Chief Executive Officer and Director
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Stephen B. Alexander
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60
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Senior Vice President and Chief Technology Officer
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Rick L. Hamilton
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48
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Senior Vice President, Blue Planet Software
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Scott A. McFeely
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56
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Senior Vice President, Global Products and Services
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James E. Moylan, Jr.
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68
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Senior Vice President and Chief Financial Officer
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Andrew C. Petrik
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56
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Vice President and Controller
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Jason M. Phipps
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47
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Senior Vice President, Global Sales and Marketing
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David M. Rothenstein
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51
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Senior Vice President, General Counsel and Secretary
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Bruce L. Claflin (1)(3)
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68
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Director
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Lawton W. Fitt (2)
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66
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Director
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Patrick T. Gallagher (1)(3)
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64
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Director
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Devinder Kumar (2)
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64
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Director
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T. Michael Nevens (2)
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70
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Director
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Judith M. O’Brien (1)(3)
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69
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Director
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Joanne B. Olsen (1)(3)
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61
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Director
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(1)
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Member of the Compensation Committee
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(2)
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Member of the Audit Committee
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(3)
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Member of the Governance and Nominations Committee
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changes in spending levels or network deployment plans by customers, particularly with respect to our service provider and Web-scale provider customers;
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order timing and volume, including book to revenue orders;
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shipment and delivery timing;
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backlog levels;
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the level of competition and pricing pressure in our industry;
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the pace and impact of price erosion that we regularly encounter in our markets;
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the impact of commercial concessions or unfavorable commercial terms required to maintain incumbency or secure new opportunities with key customers;
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the mix of revenue by product segment, geography and customer in any particular quarter;
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our level of success in achieving targeted cost reductions and improved efficiencies in our supply chain;
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our incurrence of start-up costs, including lower margin phases of projects required to support initial deployments, gain new customers or enter new markets;
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our level of success in accessing new markets and obtaining new customers;
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technology-based price compression and our introduction of new platforms with improved price for performance;
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changing market, economic and political conditions, including the impact of tariffs and other trade restrictions;
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the financial stability of our customers and suppliers;
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consolidation activity among our customers, suppliers and competitors;
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the timing of revenue recognition on sales, particularly relating to large orders;
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installation service availability and readiness of customer sites;
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availability of components and manufacturing capacity;
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adverse impact of foreign exchange; and
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seasonal effects in our business.
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the ability to meet customer business needs and drive successful outcomes;
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functionality, speed, capacity, scalability, performance, quality and reliability of solutions;
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price for performance, cost per bit and total cost of ownership of solutions;
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incumbency and strength of existing business relationships;
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ability to offer comprehensive networking solutions, consisting of hardware, software and services;
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time-to-market in delivering products and features;
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technology roadmap and forward innovation capacity and ability to deliver on network innovation;
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company stability and financial health;
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flexibility and openness of platforms, including ease of integration, interoperability and integrated management;
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ability to offer solutions that accommodate a range of emerging customer consumption models for network solutions;
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operating costs, space requirements and power consumption of network solutions;
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software and network automation and analytics capabilities;
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manufacturing and lead-time capability; and
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services and support capabilities.
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reductions in customer spending and delay, deferral or cancellation of network infrastructure initiatives;
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increased competition for fewer network projects and sales opportunities;
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increased pricing pressure that may adversely affect revenue, gross margin and profitability;
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decreased ability to forecast operating results and make decisions about budgeting, planning and future investments;
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increased overhead and production costs as a percentage of revenue;
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tightening of credit markets needed to fund capital expenditures by us or our customers;
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customer financial difficulty, including longer collection cycles and difficulties collecting accounts receivable or write-offs of receivables; and
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increased risk of charges relating to excess and obsolete inventories and the write-off of other intangible assets.
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reduced control over delivery schedules and planning;
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reliance on the quality assurance procedures of third parties;
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potential uncertainty regarding manufacturing yields and costs;
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availability of manufacturing capability and capacity, particularly during periods of high demand;
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risks and uncertainties associated with the locations or countries where our products are manufactured, including potential manufacturing disruptions caused by social, geopolitical or environmental factors;
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changes in U.S. law or policy governing tax, trade, manufacturing, development and investment in the countries where we currently manufacture our products, including the World Trade Organization Information Technology Agreement or other free trade agreements;
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inventory liability for excess and obsolete supply;
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limited warranties provided to us; and
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potential misappropriation of our intellectual property.
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adverse social, political and economic conditions in countries outside the United States;
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effects of adverse changes in currency exchange rates;
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greater difficulty in collecting accounts receivable and longer collection periods;
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difficulty and cost of staffing and managing foreign operations;
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higher incidence of corruption or unethical business practices;
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less protection for intellectual property rights in some countries;
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tax and customs changes that adversely impact our global sourcing strategy, manufacturing practices, transfer-pricing, or competitiveness of our products for global sales;
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compliance with certain testing, homologation or customization of products to conform to local standards;
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significant changes to free trade agreements, trade protection measures, tariffs, export compliance, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; and
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natural disasters, epidemics and acts of war or terrorism.
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damage to our reputation, declining sales and order cancellations;
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increased costs to remediate defects or replace products;
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payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays;
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increased warranty expense or estimates resulting from higher failure rates, additional field service obligations or other rework costs related to defects;
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higher charges for increased inventory obsolescence;
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costs, liabilities and claims that may not be covered by insurance coverage or recoverable from third parties; and
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delays in recognizing revenue or collecting accounts receivable.
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pay substantial damages or royalties;
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comply with an injunction or other court order that could prevent us from offering certain of our products;
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seek a license for the use of certain intellectual property, which may not be available on commercially reasonable terms or at all;
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develop non-infringing technology, which could require significant effort and expense and ultimately may not be successful; and
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indemnify our customers or other third parties pursuant to contractual obligations to hold them harmless or pay expenses or damages on their behalf.
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delays in recognizing revenue;
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liability for injuries to persons, damage to property or other claims relating to the actions or omissions of our service partners;
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our services revenue and gross margin may be adversely affected; and
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our relationships with customers could suffer.
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increasing our vulnerability to adverse economic and industry conditions;
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limiting our ability to obtain additional financing, particularly in unfavorable capital and credit market conditions;
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debt service and repayment obligations that may adversely impact our results of operations and reduce the availability of cash resources for other business purposes;
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limiting our flexibility in planning for, or reacting to, changes in our business and the markets; and
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placing us at a possible competitive disadvantage to competitors that have better access to capital resources.
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failure to achieve the anticipated transaction benefits or the projected financial results and operational synergies;
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greater than expected acquisition and integration costs;
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disruption due to the integration and rationalization of operations, products, technologies and personnel;
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diversion of management attention;
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difficulty completing projects of the acquired company and costs related to in-process projects;
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difficulty managing customer transitions or entering into new markets;
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the loss of key employees;
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disruption or termination of business relationships with customers, suppliers, vendors, landlords, licensors and other business partners;
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ineffective internal controls over financial reporting;
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dependence on unfamiliar suppliers or manufacturers;
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assumption of or exposure to unanticipated liabilities, including intellectual property infringement or other legal claims; and
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adverse tax or accounting impact.
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Period
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Total Number of Shares Purchased (1)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in Thousands)
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||||||
August 1, 2019 to August 31, 2019
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345,963
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$
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41.64
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345,963
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$
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373,669
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September 1, 2019 to September 30, 2019
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342,893
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$
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39.91
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342,893
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$
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359,983
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October 1, 2019 to October 31, 2019
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268,046
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$
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37.53
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268,046
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$
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349,924
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Total
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956,902
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$
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39.87
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956,902
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Year Ended October 31,
(in thousands, except per share data)
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||||||||||||||||||
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2019 (1) (3) (4)
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2018 (1) (2) (4) (5)
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2017 (2) (4) (5)
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2016
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2015
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||||||||||
Revenue
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$
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3,572,131
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$
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3,094,286
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$
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2,801,687
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$
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2,600,573
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$
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2,445,669
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Gross profit
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$
|
1,542,066
|
|
|
$
|
1,314,690
|
|
|
$
|
1,245,786
|
|
|
$
|
1,161,576
|
|
|
$
|
1,075,563
|
|
Income from operations
|
$
|
346,766
|
|
|
$
|
229,946
|
|
|
$
|
214,722
|
|
|
$
|
156,169
|
|
|
$
|
100,448
|
|
Provision (benefit) for income taxes
|
$
|
59,756
|
|
|
$
|
493,471
|
|
|
$
|
(1,105,827
|
)
|
|
$
|
14,134
|
|
|
$
|
12,097
|
|
Net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
|
$
|
72,584
|
|
|
$
|
11,667
|
|
Basic net income (loss) per common share
|
$
|
1.63
|
|
|
$
|
(2.40
|
)
|
|
$
|
8.89
|
|
|
$
|
0.52
|
|
|
$
|
0.10
|
|
Diluted net income (loss) per potential common share
|
$
|
1.61
|
|
|
$
|
(2.49
|
)
|
|
$
|
7.53
|
|
|
$
|
0.51
|
|
|
$
|
0.10
|
|
Weighted average basic common shares outstanding
|
155,720
|
|
|
143,738
|
|
|
141,997
|
|
|
138,312
|
|
|
118,416
|
|
|||||
Weighted average diluted potential common shares outstanding
|
157,612
|
|
|
143,738
|
|
|
169,919
|
|
|
150,704
|
|
|
120,101
|
|
|||||
Net cash provided by operating activities
|
$
|
413,140
|
|
|
$
|
229,261
|
|
|
$
|
234,882
|
|
|
$
|
289,520
|
|
|
$
|
262,112
|
|
Cash used for repurchase of common stock - repurchase program
|
$
|
150,076
|
|
|
$
|
110,981
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments
|
$
|
1,023,999
|
|
|
$
|
953,374
|
|
|
$
|
969,429
|
|
|
$
|
1,143,035
|
|
|
$
|
1,021,183
|
|
Deferred tax asset, net
|
$
|
714,942
|
|
|
$
|
745,039
|
|
|
$
|
1,155,104
|
|
|
$
|
1,116
|
|
|
$
|
—
|
|
Total assets
|
$
|
3,893,346
|
|
|
$
|
3,756,523
|
|
|
$
|
3,951,711
|
|
|
$
|
2,873,575
|
|
|
$
|
2,685,001
|
|
Short-term and long-term debt, net
|
$
|
687,406
|
|
|
$
|
693,450
|
|
|
$
|
935,981
|
|
|
$
|
1,253,682
|
|
|
$
|
1,264,089
|
|
Total liabilities
|
$
|
1,720,585
|
|
|
$
|
1,827,189
|
|
|
$
|
1,815,369
|
|
|
$
|
2,107,234
|
|
|
$
|
2,064,125
|
|
Stockholders’ equity
|
$
|
2,172,761
|
|
|
$
|
1,929,334
|
|
|
$
|
2,136,342
|
|
|
$
|
766,341
|
|
|
$
|
620,876
|
|
(2)
|
See Note 3 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for additional information regarding the acquisitions of Packet Design, LLC (“Packet Design”) on July 2, 2018 and DonRiver Holdings, LLC (“DonRiver”) on October 1, 2018.
|
(3)
|
See Note 17 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for additional information regarding changes in our short-term and long-term debt.
|
(4)
|
See Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for additional information regarding changes in our weighted average basic and diluted potential common shares outstanding.
|
(5)
|
Net income, deferred tax asset, net, total assets and stockholders’ equity for fiscal 2018 reflect a $472.8 million impact for the remeasurement of the net deferred tax assets and the federal transition tax and fiscal 2017 reflects a $1.2 billion deferred tax asset valuation allowance reversal. See Note 21 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for additional information.
|
|
Fiscal Year
|
|
|
|
|
|||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Networking Platforms
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Converged Packet Optical
|
$
|
2,562,841
|
|
|
71.8
|
|
$
|
2,194,519
|
|
|
70.9
|
|
$
|
368,322
|
|
|
16.8
|
|
Packet Networking
|
348,477
|
|
|
9.8
|
|
283,499
|
|
|
9.2
|
|
64,978
|
|
|
22.9
|
|
|||
Total Networking Platforms
|
2,911,318
|
|
|
81.6
|
|
2,478,018
|
|
|
80.1
|
|
433,300
|
|
|
17.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Platform Software and Services
|
155,376
|
|
|
4.3
|
|
173,949
|
|
|
5.6
|
|
(18,573
|
)
|
|
(10.7
|
)
|
|||
Blue Planet Automation Software and Services
|
54,555
|
|
|
1.5
|
|
26,764
|
|
|
0.9
|
|
27,791
|
|
|
103.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Global Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Maintenance Support and Training
|
261,337
|
|
|
7.3
|
|
245,161
|
|
|
7.9
|
|
16,176
|
|
|
6.6
|
|
|||
Installation and Deployment
|
148,233
|
|
|
4.1
|
|
128,829
|
|
|
4.2
|
|
19,404
|
|
|
15.1
|
|
|||
Consulting and Network Design
|
41,312
|
|
|
1.2
|
|
41,565
|
|
|
1.3
|
|
(253
|
)
|
|
(0.6
|
)
|
|||
Total Global Services
|
450,882
|
|
|
12.6
|
|
415,555
|
|
|
13.4
|
|
35,327
|
|
|
8.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consolidated revenue
|
$
|
3,572,131
|
|
|
100.0
|
|
$
|
3,094,286
|
|
|
100.0
|
|
$
|
477,845
|
|
|
15.4
|
|
*
|
Denotes % of total revenue
|
**
|
Denotes % change from 2018 to 2019
|
•
|
Networking Platforms segment revenue increased, reflecting product line sales increases of $368.3 million of our Converged Packet Optical products and $65.0 million of our Packet Networking products.
|
◦
|
Converged Packet Optical sales increased, primarily reflecting sales increases of $249.7 million of our Waveserver stackable interconnect system and $193.4 million of our 6500 Packet-Optical Platform. These increases were partially offset by a sales decrease of $71.5 million of our 5410/5430 Reconfigurable Switching Systems. Waveserver sales increases reflect sales to Web-scale providers which have been an increasingly important contributor to our overall growth, and certain of these customers were among our largest customers by revenue. 6500 Packet-Optical Platform sales increases primarily reflect increased sales to communications service providers and cable and multiservice operators.
|
◦
|
Packet Networking sales increased, primarily reflecting a sales increase of $99.1 million of our 6500 Packet Transport System (PTS) to a North American service provider, partially offset by sales decreases of $14.9 million of our packet networking platform independent software and $11.8 million of our 3000 and 5000 families of service delivery and aggregation switches. Part of our strategy is to continue to grow sales and reduce our concentration of revenue within our Packet Networking product line.
|
•
|
Platform Software and Services segment revenue decreased, reflecting software sales decreases of $20.1 million due to decreases of $12.0 million and $8.1 million in sales of our legacy software and our Manage, Control and Plan (“MCP”) software, respectively, partially offset by an increase of $1.5 million related to services. We continue to pursue further customer adoption of our MCP software platform and its enhanced features and functionality. As we transition existing customers as well as features and functionality from our legacy software to this platform, we expect revenue declines for our other legacy software solutions within this segment.
|
•
|
Blue Planet Automation Software and Services segment revenue increased, reflecting software sales increases of $5.1 million and service sales increases of $22.7 million. The increase in our software and service sales include sales of $12.8 million and $16.1 million related to the Packet Design and DonRiver businesses acquired during fiscal 2018, respectively. Our entrance into the software automation market is in the early stages and, as such, revenue from our Blue Planet Automation Software platform has not been significant to date.
|
•
|
Global Services segment revenue increased, primarily reflecting sales increases of $19.4 million of our installation and deployment services and $16.2 million of our maintenance support.
|
|
Fiscal Year
|
|
|
|
|
|||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
|||||||
North America
|
$
|
2,351,260
|
|
|
65.8
|
|
$
|
1,886,450
|
|
|
61.0
|
|
$
|
464,810
|
|
|
24.6
|
|
EMEA
|
566,718
|
|
|
15.9
|
|
464,876
|
|
|
15.0
|
|
101,842
|
|
|
21.9
|
|
|||
CALA
|
152,653
|
|
|
4.3
|
|
140,177
|
|
|
4.5
|
|
12,476
|
|
|
8.9
|
|
|||
APAC
|
501,500
|
|
|
14.0
|
|
602,783
|
|
|
19.5
|
|
(101,283
|
)
|
|
(16.8
|
)
|
|||
Total
|
$
|
3,572,131
|
|
|
100.0
|
|
$
|
3,094,286
|
|
|
100.0
|
|
$
|
477,845
|
|
|
15.4
|
|
*
|
Denotes % of total revenue
|
**
|
Denotes % change from 2018 to 2019
|
•
|
North America revenue increased, reflecting increases of $453.6 million within our Networking Platforms segment, $15.4 million within our Global Services segment, and $15.9 million within our Blue Planet Automation Software and Services segment. These increases were partially offset by a decrease of $20.1 million within our Platform Software and Services segment. The Networking Platforms segment revenue increase includes a product line sales increase of $349.5 million of Converged Packet Optical products, primarily related to sales increases of $201.5 million of our 6500 Packet-Optical Platform to communication service providers and $165.9 million of our Waveserver to Web-scale providers.
|
•
|
EMEA revenue increased, reflecting increases of $91.8 million within our Networking Platforms segment. The increase within our Networking Platforms segment primarily reflects a product line sales increase of $90.4 million of Converged Packet Optical products, primarily related to sales increases of $66.0 million of our Waveserver to Web-scale providers and $33.7 million of our 6500 Packet-Optical Platform primarily to communications submarine network operators. The increase in EMEA revenue was primarily driven by increased sales in the United Kingdom and the Netherlands.
|
•
|
CALA revenue increased, reflecting increases of $4.3 million within our Networking Platforms segment and $5.8 million within our Global Services segment. The increase in CALA revenue primarily reflects increased sales to cable and multiservice operators and communications services providers in Mexico.
|
•
|
APAC revenue decreased, reflecting a decrease of $116.4 million within our Networking Platforms segment partially offset by revenue increases of $6.4 million within our Blue Planet Automation Software and Services segment, $5.7 million within our Global Services segment and $3.0 million within our Platform Software and Services segment. The decrease in Networking Platforms segment revenue reflects product line decreases of $74.8 million in Converged Packet Optical sales and $41.6 million in Packet Networking sales, primarily in India and Australia. See “Risk Factors – Changes in government regulations . . .” for additional information regarding an October 2019 regulatory ruling in India that may adversely impact future spending in that geography. The decrease in Converged Packet Optical sales is primarily due to decreases of $46.4 million and $45.8 million in sales of our 6500 Packet-Optical Platform and our 5410/5430 Reconfigurable Switching Systems, respectively, partially offset by an increase of $18.3 million in sales of Waveserver. Although our APAC revenue declined, we experienced increased sales in Japan and continued to capture new market share with communications service providers in the region.
|
|
Fiscal Year
|
|
|
|
|
||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
||||||
Total revenue
|
$
|
3,572,131
|
|
|
100.0
|
|
$
|
3,094,286
|
|
|
100.0
|
|
$
|
477,845
|
|
|
15.4
|
Total cost of goods sold
|
2,030,065
|
|
|
56.8
|
|
1,779,596
|
|
|
57.5
|
|
250,469
|
|
|
14.1
|
|||
Gross profit
|
$
|
1,542,066
|
|
|
43.2
|
|
$
|
1,314,690
|
|
|
42.5
|
|
$
|
227,376
|
|
|
17.3
|
*
|
Denotes % of total revenue
|
**
|
Denotes % change from 2018 to 2019
|
|
Fiscal Year
|
|
|
|
|
||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
||||||
Product revenue
|
$
|
2,983,815
|
|
|
100.0
|
|
$
|
2,565,460
|
|
|
100.0
|
|
$
|
418,355
|
|
|
16.3
|
Product cost of goods sold
|
1,716,358
|
|
|
57.5
|
|
1,507,157
|
|
|
58.7
|
|
209,201
|
|
|
13.9
|
|||
Product gross profit
|
$
|
1,267,457
|
|
|
42.5
|
|
$
|
1,058,303
|
|
|
41.3
|
|
$
|
209,154
|
|
|
19.8
|
*
|
Denotes % of product revenue
|
**
|
Denotes % change from 2018 to 2019
|
|
Fiscal Year
|
|
|
|
|
||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
||||||
Service revenue
|
$
|
588,316
|
|
|
100.0
|
|
$
|
528,826
|
|
|
100.0
|
|
$
|
59,490
|
|
|
11.2
|
Service cost of goods sold
|
313,707
|
|
|
53.3
|
|
272,439
|
|
|
51.5
|
|
41,268
|
|
|
15.1
|
|||
Service gross profit
|
$
|
274,609
|
|
|
46.7
|
|
$
|
256,387
|
|
|
48.5
|
|
$
|
18,222
|
|
|
7.1
|
*
|
Denotes % of service revenue
|
**
|
Denotes % change from 2018 to 2019
|
•
|
Gross profit as a percentage of revenue reflects improved product gross profit as described below. In recent periods, we have encountered fluctuations or reductions in our gross margin as a result of our strategy to leverage our technology leadership and to capture aggressively additional market share and displace competitors, with the intent to improve margin in the long term as we sell channel cards, maintenance services, and other higher margin products to customers adding capacity or services to their networks. During fiscal 2019, our gross margin benefited from the success of this ongoing strategy and the resulting favorable mix of customers, network deployments and capacity additions during the period. Continued implementation of this strategy may require that we agree to aggressive pricing, commercial concessions and other unfavorable terms, or result in an unfavorable mix of revenues from early stage deployments during a particular period, which can adversely impact gross margin.
|
•
|
Gross profit on products as a percentage of product revenue increased, primarily due to product cost reductions, a favorable mix of customers, network deployments and capacity additions, partially offset by market-based price compression we encountered during the period.
|
•
|
Gross profit on services as a percentage of services revenue decreased, primarily as a result of lower margins on our Blue Planet Automation software services, due to increased costs associated with additional resources to support our corporate strategy to grow our software automation business, and the impact of early stages of international network deployments.
|
•
|
Research and development expense primarily consists of salaries and related employee expense (including share-based compensation expense), prototype costs relating to design, development, product testing, depreciation expense, and third-party consulting costs.
|
•
|
Selling and marketing expense primarily consists of salaries, commissions and related employee expense (including share-based compensation expense) and sales and marketing support expense, including travel, demonstration units, trade show expense, and third-party consulting costs.
|
•
|
General and administrative expense primarily consists of salaries and related employee expense (including share-based compensation expense) and costs for third-party consulting and other services.
|
•
|
Amortization of intangible assets primarily reflects the amortization of both purchased technology and the value of customer relationships derived from our acquisitions.
|
•
|
Significant asset impairments and restructuring costs primarily reflect actions we have taken to improve the alignment of our workforce, facilities and operating costs with perceived market opportunities, business strategies, changes in market and business conditions and significant impairments of assets.
|
•
|
Acquisition and integration costs consist of expenses for financial, legal and accounting advisors, severance and other employee-related costs associated with our acquisitions of Packet Design and DonRiver, including costs associated with a three-year earn-out arrangement related to the DonRiver acquisition.
|
|
Fiscal Year
|
|
|
|
|
|||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
|||||||
Research and development
|
$
|
548,139
|
|
|
15.3
|
|
$
|
491,564
|
|
|
15.9
|
|
$
|
56,575
|
|
|
11.5
|
|
Selling and marketing
|
423,046
|
|
|
11.8
|
|
394,060
|
|
|
12.7
|
|
28,986
|
|
|
7.4
|
|
|||
General and administrative
|
174,399
|
|
|
4.9
|
|
160,133
|
|
|
5.2
|
|
14,266
|
|
|
8.9
|
|
|||
Amortization of intangible assets
|
21,808
|
|
|
0.6
|
|
15,737
|
|
|
0.5
|
|
6,071
|
|
|
38.6
|
|
|||
Acquisition and integration costs
|
3,370
|
|
|
0.1
|
|
5,111
|
|
|
0.2
|
|
(1,741
|
)
|
|
(34.1
|
)
|
|||
Significant asset impairments and restructuring costs
|
24,538
|
|
|
0.7
|
|
18,139
|
|
|
0.6
|
|
6,399
|
|
|
35.3
|
|
|||
Total operating expenses
|
$
|
1,195,300
|
|
|
33.4
|
|
$
|
1,084,744
|
|
|
35.1
|
|
$
|
110,556
|
|
|
10.2
|
|
*
|
Denotes % of total revenue
|
**
|
Denotes % change from 2018 to 2019
|
•
|
Research and development expense benefited by $8.1 million as a result of foreign exchange rates, net of hedging, primarily due to a stronger U.S. Dollar in relation to the Canadian Dollar and Indian Rupee. Including the effect of foreign exchange rates, research and development expenses increased by $56.6 million. This increase primarily reflects $19.9 million in employee and compensation costs, $16.9 million in professional services, $9.7 million for facility and information technology costs, $3.3 million in prototype expense and $1.0 million in technology and related expense. This increase also reflects a reduced benefit of $4.4 million for the Evolution of Networking Services through a Corridor in Quebec and Ontario for Research and Innovation (“ENCQOR”) grant reimbursement. For more information on the ENCQOR grant, see Note 25 to our Consolidated Financial Statements included in Item 8 of Part II of this report.
|
•
|
Selling and marketing expense benefited by $7.5 million as a result of foreign exchange rates primarily due to a stronger U.S. Dollar in relation to the British Pound and Canadian Dollar. Including the effect of foreign exchange rates, sales and marketing expense increased, primarily reflecting increases of $22.9 million in employee and compensation costs and $5.7 million for facilities and information technology costs.
|
•
|
General and administrative expense increased, primarily reflecting increases of $8.7 million in employee and compensation costs and $4.0 million for bad debt expense.
|
•
|
Amortization of intangible assets increased due to additional intangibles acquired in connection with our acquisitions of Packet Design and DonRiver during fiscal 2018.
|
•
|
Acquisition and integration costs reflect financial, legal and accounting advisors and severance and other employment-related costs related to our acquisitions of Packet Design and DonRiver.
|
•
|
Significant asset impairments and restructuring costs reflect global workforce reductions as part of a business optimization strategy to improve gross margin, constrain operating expense, and redesign certain business processes and unfavorable lease commitments for certain facility locations in the United States and India where we have vacated unused space.
|
|
Fiscal Year
|
|
|
|
|
||||||||||||||
|
2019
|
|
%*
|
|
2018
|
|
%*
|
|
Increase
(decrease)
|
|
%**
|
||||||||
Interest and other income (loss), net
|
$
|
3,876
|
|
|
0.1
|
|
$
|
(12,029
|
)
|
|
(0.4
|
)
|
|
$
|
15,905
|
|
|
(132.2
|
)
|
Interest expense
|
$
|
37,452
|
|
|
1.0
|
|
$
|
55,249
|
|
|
1.8
|
|
|
$
|
(17,797
|
)
|
|
(32.2
|
)
|
Loss on extinguishment/modification of debt
|
$
|
—
|
|
|
—
|
|
$
|
(13,887
|
)
|
|
(0.4
|
)
|
|
$
|
(13,887
|
)
|
|
100.0
|
|
Provision for income taxes
|
$
|
59,756
|
|
|
1.7
|
|
$
|
493,471
|
|
|
15.9
|
|
|
$
|
(433,715
|
)
|
|
(87.9
|
)
|
*
|
Denotes % of total revenue
|
**
|
Denotes % change from 2018 to 2019
|
•
|
Interest and other income, net increased, reflecting a $2.8 million favorable impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity. Interest and other income, net, in fiscal 2018 included a $12.1 million loss due to a mark to market fair value adjustment related to the conversion feature of our 3.75% Convertible Senior Notes due October 15, 2018 (the “New Notes”).
|
•
|
Interest expense decreased, primarily due to a reduction in our aggregate outstanding debt during the fourth quarter of fiscal 2018.
|
•
|
Loss on extinguishment and modification of debt in fiscal 2018 reflects approximately $10.0 million of extinguishment of debt costs related to our conversion of our 4.0% Convertible Senior Notes due December 15, 2020 and approximately $3.8 million in debt modification costs related to our term loan refinancing.
|
•
|
Provision for income taxes decreased, primarily due to the fiscal 2018 impact of the Tax Act, including $438.2 million in expenses for the remeasurement of our net deferred tax assets and a $34.6 million charge related to a transition tax on accumulated historical foreign earnings and their deemed repatriation to the U.S. The effective tax rate for fiscal 2019 was lower compared to fiscal 2018, primarily due to the fiscal 2018 impact of the Tax Act, including the remeasurement of our net deferred tax assets and the transition tax on accumulated historical foreign earnings and their deemed repatriation to the U.S.
|
|
Fiscal Year
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
Increase
(decrease)
|
|
%*
|
|||||||
Segment profit (loss):
|
|
|
|
|
|
|
|
|||||||
Networking Platforms
|
$
|
759,244
|
|
|
$
|
581,113
|
|
|
$
|
178,131
|
|
|
30.7
|
|
Platform Software and Services
|
$
|
64,210
|
|
|
$
|
78,048
|
|
|
$
|
(13,838
|
)
|
|
(17.7
|
)
|
Blue Planet Automation Software and Services
|
$
|
(17,769
|
)
|
|
$
|
(8,240
|
)
|
|
$
|
(9,529
|
)
|
|
115.6
|
|
Global Services
|
$
|
188,242
|
|
|
$
|
172,205
|
|
|
$
|
16,037
|
|
|
9.3
|
|
*
|
Denotes % change from 2018 to 2019
|
•
|
Networking Platforms segment profit increased, primarily due to higher sales volume and improved gross margin, as described above, partially offset by higher research and development costs.
|
•
|
Platform Software and Services segment profit decreased, primarily due to lower sales volume, as described above.
|
•
|
Blue Planet Automation Software and Services segment loss increased, primarily reflecting higher research and development costs and reduced gross margin on software-related services, as described above, and the impact of early stages of international network deployment.
|
•
|
Global Services segment profit increased, primarily due to higher sales volume and improved gross margin.
|
|
Fiscal Year
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
Increase
(decrease)
|
|
%*
|
|||||||
Segment profit (loss):
|
|
|
|
|
|
|
|
|||||||
Platform Software and Services
|
$
|
78,048
|
|
|
$
|
47,353
|
|
|
$
|
30,695
|
|
|
64.8
|
|
Blue Planet Automation Software and Services
|
$
|
(8,240
|
)
|
|
$
|
(14,817
|
)
|
|
$
|
6,577
|
|
|
(44.4
|
)
|
•
|
Platform Software and Services segment profit increased, primarily due to higher sales volume as described in Item 7 of Part II of our 2018 Annual Report.
|
•
|
Blue Planet Automation Software and Services segment loss decreased, primarily reflecting higher revenues as described in Item 7 of Part II of our 2018 Annual Report, and lower research and development costs, partially offset by reduced gross margin on software-related services.
|
|
October 31,
|
|
Increase
|
||||||||
|
2019
|
|
2018
|
|
(decrease)
|
||||||
Cash and cash equivalents
|
$
|
904,045
|
|
|
$
|
745,423
|
|
|
$
|
158,622
|
|
Short-term investments in marketable debt securities
|
109,940
|
|
|
148,981
|
|
|
(39,041
|
)
|
|||
Long-term investments in marketable debt securities
|
10,014
|
|
|
58,970
|
|
|
(48,956
|
)
|
|||
Total cash and cash equivalents and investments in marketable debt securities
|
$
|
1,023,999
|
|
|
$
|
953,374
|
|
|
$
|
70,625
|
|
|
Year ended
|
||
|
October 31, 2019
|
||
Net income
|
$
|
253,434
|
|
Adjustments for non-cash charges:
|
|
||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements
|
87,576
|
|
|
Share-based compensation costs
|
59,736
|
|
|
Amortization of intangible assets
|
35,136
|
|
|
Deferred taxes
|
19,865
|
|
|
Provision for doubtful accounts
|
6,740
|
|
|
Provision for inventory excess and obsolescence
|
28,085
|
|
|
Provision for warranty
|
23,105
|
|
|
Other
|
(910
|
)
|
|
Net income (adjusted for non-cash charges)
|
$
|
512,767
|
|
|
Year ended
|
||
|
October 31, 2019
|
||
Cash provided by accounts receivable
|
$
|
65,712
|
|
Cash used in inventories
|
(112,941
|
)
|
|
Cash used in prepaid expenses and other
|
(96,618
|
)
|
|
Cash provided by accounts payable, accruals and other obligations
|
27,740
|
|
|
Cash provided by deferred revenue
|
16,480
|
|
|
Cash used in working capital
|
$
|
(99,627
|
)
|
•
|
The $65.7 million of cash provided by accounts receivable during fiscal 2019 reflects increased cash collection;
|
•
|
The $112.9 million of cash used in inventory during fiscal 2019 primarily reflects increases in finished goods to meet customer delivery schedules;
|
•
|
The $96.6 million of cash used in prepaid expenses and other during fiscal 2019 primarily reflects increases in contract assets for unbilled accounts receivable due to changes in revenue recognition for installation services and certain product sales;
|
•
|
The $27.7 million of cash provided by accounts payable, accruals and other obligations during fiscal 2019 primarily reflects higher employee bonus accrual associated with our annual cash incentive compensation plan, partially offset by payout of accrued employee leave in North America in connection with a new paid time off policy; and
|
•
|
The $16.5 million of cash provided by deferred revenue during fiscal 2019 represents an increase in advanced payments received from customers prior to revenue recognition.
|
|
Year ended
|
||
|
October 31, 2019
|
||
Term Loan due September 28, 2025(1)
|
30,751
|
|
|
Interest rate swaps(2)
|
2,112
|
|
|
ABL Credit Facilities(3)
|
1,620
|
|
|
Capital leases
|
5,096
|
|
|
Total cash paid during period
|
$
|
39,579
|
|
(1)
|
Interest on the 2025 Term Loan is payable periodically based on the interest period selected for borrowing. The 2025 Term Loan bears interest at LIBOR plus a spread of 2.00% subject to a minimum LIBOR rate of 0.00%. As of the end of fiscal 2019, the interest rate on the 2025 Term Loan was 3.85%.
|
(2)
|
We entered into a floating-to-fixed interest rate swap that fixed the LIBOR rate of approximately $350.0 million of the principal amount of the 2025 Term Loan at 2.957% through September 2023.
|
(3)
|
During fiscal 2019, we utilized the ABL Credit Facility and its predecessor to collateralize certain standby letters of credit and paid $1.6 million in commitment fees, interest expense and other administrative charges relating to these facilities.
|
|
Total
|
|
Less than one
year
|
|
One to three
years
|
|
Three to five
years
|
|
Thereafter
|
||||||||||
Principal due on Term Loan due September 28, 2025(1)
|
$
|
693,000
|
|
|
$
|
7,000
|
|
|
$
|
14,000
|
|
|
$
|
14,000
|
|
|
$
|
658,000
|
|
Interest due on Term Loan due September 28, 2025(1)
|
156,040
|
|
|
26,934
|
|
|
53,049
|
|
|
52,098
|
|
|
23,959
|
|
|||||
Payments due under interest rate swaps(1)
|
15,440
|
|
|
3,941
|
|
|
7,882
|
|
|
3,617
|
|
|
—
|
|
|||||
Operating leases(2)
|
119,862
|
|
|
28,776
|
|
|
40,951
|
|
|
24,025
|
|
|
26,110
|
|
|||||
Purchase obligations(3)
|
495,150
|
|
|
495,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital leases - buildings and equipment(4)
|
106,319
|
|
|
7,652
|
|
|
15,407
|
|
|
16,134
|
|
|
67,126
|
|
|||||
Other obligations
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total (5)
|
$
|
1,585,845
|
|
|
$
|
569,487
|
|
|
$
|
131,289
|
|
|
$
|
109,874
|
|
|
$
|
775,195
|
|
(1)
|
Interest on the 2025 Term Loan and payments due under the interest rate swaps is variable and is calculated using the rate in effect on the balance sheet date. For additional information about our term loans and the interest rate swaps, see Notes 15 and 17 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report and Item 7A of Part II of this annual report.
|
(2)
|
Does not include variable insurance, taxes, maintenance and other costs that may be required by the applicable operating lease. These costs are not expected to have a material future impact.
|
(3)
|
Purchase obligations relate to purchase order commitments to our contract manufacturers and component suppliers for inventory. In certain instances, we are permitted to cancel, reschedule or adjust these orders. Consequently, only a portion of the amount reported above relates to firm, non-cancelable and unconditional obligations.
|
(4)
|
This represents the total minimum lease payments due for all buildings and equipment subject to capital lease accounting. It does not include variable insurance, taxes, maintenance and other costs required by the applicable capital lease. These costs are not expected to have a material future impact.
|
(5)
|
As of October 31, 2019, we also had $13.1 million of other long-term obligations on our Consolidated Balance Sheet for unrecognized tax positions that are not included in this table because the timing or amount of any cash settlement with the respective tax authority cannot be reasonably estimated.
|
|
Total
|
|
Less than one
year
|
|
One to
three years
|
|
Three to
five years
|
|
Thereafter
|
||||||||||
Standby letters of credit
|
$
|
72,920
|
|
|
$
|
29,077
|
|
|
$
|
21,741
|
|
|
$
|
12,847
|
|
|
$
|
9,255
|
|
|
Oct. 31,
|
|
Jul. 31,
|
|
Apr. 30,
|
|
Jan. 31,
|
|
Oct. 31,
|
|
Jul. 31,
|
|
Apr. 30,
|
|
Jan. 31,
|
||||||||||||||||
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
820,007
|
|
|
$
|
810,588
|
|
|
$
|
710,688
|
|
|
$
|
642,532
|
|
|
$
|
743,867
|
|
|
$
|
691,758
|
|
|
$
|
604,226
|
|
|
$
|
525,609
|
|
Services
|
147,980
|
|
|
150,018
|
|
|
154,323
|
|
|
135,995
|
|
|
155,489
|
|
|
127,059
|
|
|
125,752
|
|
|
120,526
|
|
||||||||
Total revenue
|
967,987
|
|
|
960,606
|
|
|
865,011
|
|
|
778,527
|
|
|
899,356
|
|
|
818,817
|
|
|
729,978
|
|
|
646,135
|
|
||||||||
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
469,945
|
|
|
454,921
|
|
|
411,050
|
|
|
380,442
|
|
|
421,583
|
|
|
399,886
|
|
|
372,568
|
|
|
313,120
|
|
||||||||
Services
|
78,346
|
|
|
81,333
|
|
|
79,284
|
|
|
74,744
|
|
|
79,698
|
|
|
67,388
|
|
|
64,103
|
|
|
61,250
|
|
||||||||
Total costs of goods sold
|
548,291
|
|
|
536,254
|
|
|
490,334
|
|
|
455,186
|
|
|
501,281
|
|
|
467,274
|
|
|
436,671
|
|
|
374,370
|
|
||||||||
Gross profit
|
419,696
|
|
|
424,352
|
|
|
374,677
|
|
|
323,341
|
|
|
398,075
|
|
|
351,543
|
|
|
293,307
|
|
|
271,765
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
141,657
|
|
|
139,880
|
|
|
137,969
|
|
|
128,633
|
|
|
134,983
|
|
|
121,133
|
|
|
116,924
|
|
|
118,524
|
|
||||||||
Selling and marketing
|
117,201
|
|
|
104,230
|
|
|
103,502
|
|
|
98,113
|
|
|
112,791
|
|
|
95,395
|
|
|
97,359
|
|
|
88,515
|
|
||||||||
General and administrative
|
50,307
|
|
|
42,695
|
|
|
42,154
|
|
|
39,243
|
|
|
44,539
|
|
|
38,212
|
|
|
38,976
|
|
|
38,406
|
|
||||||||
Amortization of intangible assets
|
5,222
|
|
|
5,529
|
|
|
5,529
|
|
|
5,528
|
|
|
4,654
|
|
|
3,837
|
|
|
3,623
|
|
|
3,623
|
|
||||||||
Acquisition and integration costs
|
(735
|
)
|
|
1,362
|
|
|
1,135
|
|
|
1,608
|
|
|
3,778
|
|
|
1,333
|
|
|
—
|
|
|
—
|
|
||||||||
Significant asset impairments and restructuring costs
|
12,842
|
|
|
5,355
|
|
|
4,068
|
|
|
2,273
|
|
|
1,460
|
|
|
6,359
|
|
|
4,359
|
|
|
5,961
|
|
||||||||
Total operating expenses
|
326,494
|
|
|
299,051
|
|
|
294,357
|
|
|
275,398
|
|
|
302,205
|
|
|
266,269
|
|
|
261,241
|
|
|
255,029
|
|
||||||||
Income from operations
|
93,202
|
|
|
125,301
|
|
|
80,320
|
|
|
47,943
|
|
|
95,870
|
|
|
85,274
|
|
|
32,066
|
|
|
16,736
|
|
||||||||
Interest and other income (loss), net
|
(1,183
|
)
|
|
1,050
|
|
|
(244
|
)
|
|
4,253
|
|
|
(13,357
|
)
|
|
(1,543
|
)
|
|
1,296
|
|
|
1,575
|
|
||||||||
Interest expense
|
(9,136
|
)
|
|
(9,404
|
)
|
|
(9,471
|
)
|
|
(9,441
|
)
|
|
(14,873
|
)
|
|
(13,611
|
)
|
|
(13,031
|
)
|
|
(13,734
|
)
|
||||||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,887
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Income before income taxes
|
82,883
|
|
|
116,947
|
|
|
70,605
|
|
|
42,755
|
|
|
53,753
|
|
|
70,120
|
|
|
20,331
|
|
|
4,577
|
|
||||||||
Provision (benefit) for income tax
|
2,552
|
|
|
30,198
|
|
|
17,867
|
|
|
9,139
|
|
|
(10,224
|
)
|
|
19,280
|
|
|
6,475
|
|
|
477,940
|
|
||||||||
Net income (loss)
|
$
|
80,331
|
|
|
$
|
86,749
|
|
|
$
|
52,738
|
|
|
$
|
33,616
|
|
|
$
|
63,977
|
|
|
$
|
50,840
|
|
|
$
|
13,856
|
|
|
$
|
(473,363
|
)
|
Basic net income (loss) per common share
|
$
|
0.52
|
|
|
$
|
0.56
|
|
|
$
|
0.34
|
|
|
$
|
0.22
|
|
|
$
|
0.45
|
|
|
$
|
0.35
|
|
|
$
|
0.10
|
|
|
$
|
(3.29
|
)
|
Diluted net income (loss) per potential common share
|
$
|
0.51
|
|
|
$
|
0.55
|
|
|
$
|
0.33
|
|
|
$
|
0.21
|
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.09
|
|
|
$
|
(3.29
|
)
|
Weighted average basic common shares outstanding
|
154,852
|
|
|
155,488
|
|
|
156,170
|
|
|
156,314
|
|
|
143,659
|
|
|
143,400
|
|
|
143,975
|
|
|
143,922
|
|
||||||||
Weighted average diluted potential common shares outstanding
|
156,612
|
|
|
157,455
|
|
|
158,289
|
|
|
158,174
|
|
|
157,745
|
|
|
159,998
|
|
|
147,973
|
|
|
143,922
|
|
|
Page
|
|
Number
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
904,045
|
|
|
$
|
745,423
|
|
Short-term investments
|
109,940
|
|
|
148,981
|
|
||
Accounts receivable, net
|
724,854
|
|
|
786,502
|
|
||
Inventories, net
|
345,049
|
|
|
262,751
|
|
||
Prepaid expenses and other
|
297,914
|
|
|
198,945
|
|
||
Total current assets
|
2,381,802
|
|
|
2,142,602
|
|
||
Long-term investments
|
10,014
|
|
|
58,970
|
|
||
Equipment, building, furniture and fixtures, net
|
286,884
|
|
|
292,067
|
|
||
Goodwill
|
297,937
|
|
|
297,968
|
|
||
Other intangible assets, net
|
112,781
|
|
|
148,225
|
|
||
Deferred tax asset, net
|
714,942
|
|
|
745,039
|
|
||
Other long-term assets
|
88,986
|
|
|
71,652
|
|
||
Total assets
|
$
|
3,893,346
|
|
|
$
|
3,756,523
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
344,819
|
|
|
$
|
340,582
|
|
Accrued liabilities and other short-term obligations
|
382,740
|
|
|
340,075
|
|
||
Deferred revenue
|
111,381
|
|
|
111,134
|
|
||
Current portion of long-term debt
|
7,000
|
|
|
7,000
|
|
||
Debt conversion liability
|
—
|
|
|
164,212
|
|
||
Total current liabilities
|
845,940
|
|
|
963,003
|
|
||
Long-term deferred revenue
|
45,492
|
|
|
58,323
|
|
||
Other long-term obligations
|
148,747
|
|
|
119,413
|
|
||
Long-term debt, net
|
680,406
|
|
|
686,450
|
|
||
Total liabilities
|
$
|
1,720,585
|
|
|
$
|
1,827,189
|
|
Commitments and contingencies (Note 25)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock — par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock — par value $0.01; 290,000,000 shares authorized; 154,403,850 and 154,318,531 shares issued and outstanding
|
1,544
|
|
|
1,543
|
|
||
Additional paid-in capital
|
6,837,714
|
|
|
6,881,223
|
|
||
Accumulated other comprehensive loss
|
(22,084
|
)
|
|
(5,780
|
)
|
||
Accumulated deficit
|
(4,644,413
|
)
|
|
(4,947,652
|
)
|
||
Total stockholders’ equity
|
2,172,761
|
|
|
1,929,334
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,893,346
|
|
|
$
|
3,756,523
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Products
|
$
|
2,983,815
|
|
|
$
|
2,565,460
|
|
|
$
|
2,318,581
|
|
Services
|
588,316
|
|
|
528,826
|
|
|
483,106
|
|
|||
Total revenue
|
3,572,131
|
|
|
3,094,286
|
|
|
2,801,687
|
|
|||
Cost of goods sold:
|
|
|
|
|
|
||||||
Products
|
1,716,358
|
|
|
1,507,157
|
|
|
1,308,295
|
|
|||
Services
|
313,707
|
|
|
272,439
|
|
|
247,606
|
|
|||
Total cost of goods sold
|
2,030,065
|
|
|
1,779,596
|
|
|
1,555,901
|
|
|||
Gross profit
|
1,542,066
|
|
|
1,314,690
|
|
|
1,245,786
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
548,139
|
|
|
491,564
|
|
|
475,329
|
|
|||
Selling and marketing
|
423,046
|
|
|
394,060
|
|
|
356,169
|
|
|||
General and administrative
|
174,399
|
|
|
160,133
|
|
|
142,604
|
|
|||
Amortization of intangible assets
|
21,808
|
|
|
15,737
|
|
|
33,029
|
|
|||
Acquisition and integration costs
|
3,370
|
|
|
5,111
|
|
|
—
|
|
|||
Significant asset impairments and restructuring costs
|
24,538
|
|
|
18,139
|
|
|
23,933
|
|
|||
Total operating expenses
|
1,195,300
|
|
|
1,084,744
|
|
|
1,031,064
|
|
|||
Income from operations
|
346,766
|
|
|
229,946
|
|
|
214,722
|
|
|||
Interest and other income (loss), net
|
3,876
|
|
|
(12,029
|
)
|
|
913
|
|
|||
Interest expense
|
(37,452
|
)
|
|
(55,249
|
)
|
|
(55,852
|
)
|
|||
Loss on extinguishment and modification of debt
|
—
|
|
|
(13,887
|
)
|
|
(3,657
|
)
|
|||
Income before income taxes
|
313,190
|
|
|
148,781
|
|
|
156,126
|
|
|||
Provision (benefit) for income taxes
|
59,756
|
|
|
493,471
|
|
|
(1,105,827
|
)
|
|||
Net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
|
|
|
|
|
|
||||||
Basic net income (loss) per common share
|
$
|
1.63
|
|
|
$
|
(2.40
|
)
|
|
$
|
8.89
|
|
Diluted net income (loss) per potential common share
|
$
|
1.61
|
|
|
$
|
(2.49
|
)
|
|
$
|
7.53
|
|
Weighted average basic common shares outstanding
|
155,720
|
|
|
143,738
|
|
|
141,997
|
|
|||
Weighted average diluted potential common shares outstanding
|
157,612
|
|
|
143,738
|
|
|
169,919
|
|
|
Year ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
Change in unrealized gain (loss) on available-for-sale securities, net of tax
|
577
|
|
|
26
|
|
|
(590
|
)
|
|||
Change in unrealized gain (loss) on foreign currency forward contracts, net of tax
|
3,985
|
|
|
(1,674
|
)
|
|
(295
|
)
|
|||
Change in unrealized gain (loss) on forward starting interest rate swaps, net of tax
|
(20,103
|
)
|
|
6,199
|
|
|
6,185
|
|
|||
Change in accumulated translation adjustments
|
(763
|
)
|
|
686
|
|
|
8,012
|
|
|||
Other comprehensive income (loss)
|
(16,304
|
)
|
|
5,237
|
|
|
13,312
|
|
|||
Total comprehensive income (loss)
|
$
|
237,130
|
|
|
$
|
(339,453
|
)
|
|
$
|
1,275,265
|
|
|
Common Stock
Shares
|
|
Par Value
|
|
Additional
Paid-in-Capital
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||
Balance at October 31, 2016
|
139,767,627
|
|
|
$
|
1,398
|
|
|
$
|
6,715,478
|
|
|
$
|
(24,329
|
)
|
|
$
|
(5,926,206
|
)
|
|
$
|
766,341
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,261,953
|
|
|
1,261,953
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
13,312
|
|
|
—
|
|
|
13,312
|
|
|||||
Issuance of shares from employee equity plans
|
3,275,600
|
|
|
32
|
|
|
20,380
|
|
|
—
|
|
|
—
|
|
|
20,412
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
48,360
|
|
|
—
|
|
|
—
|
|
|
48,360
|
|
|||||
Reversal of deferred tax asset valuation allowance
|
—
|
|
|
—
|
|
|
25,964
|
|
|
—
|
|
|
—
|
|
|
25,964
|
|
|||||
Balance at October 31, 2017
|
143,043,227
|
|
|
1,430
|
|
|
6,810,182
|
|
|
(11,017
|
)
|
|
(4,664,253
|
)
|
|
2,136,342
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(344,690
|
)
|
|
(344,690
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
5,237
|
|
|
—
|
|
|
5,237
|
|
|||||
Reclassification of cash conversion feature
|
—
|
|
|
—
|
|
|
(152,142
|
)
|
|
—
|
|
|
—
|
|
|
(152,142
|
)
|
|||||
Conversion of convertible notes into common shares
|
12,236,146
|
|
|
122
|
|
|
261,981
|
|
|
—
|
|
|
—
|
|
|
262,103
|
|
|||||
Repurchases of common stock - repurchase program
|
(4,290,801
|
)
|
|
(44
|
)
|
|
(110,937
|
)
|
|
—
|
|
|
—
|
|
|
(110,981
|
)
|
|||||
Issuance of shares from employee equity plans
|
3,484,018
|
|
|
37
|
|
|
23,090
|
|
|
—
|
|
|
—
|
|
|
23,127
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
52,972
|
|
|
—
|
|
|
—
|
|
|
52,972
|
|
|||||
Shares repurchased for tax withholdings on vesting of restricted stock units
|
(154,059
|
)
|
|
(2
|
)
|
|
(4,755
|
)
|
|
—
|
|
|
—
|
|
|
(4,757
|
)
|
|||||
Effect of adoption of new accounting standard (Note 1)
|
—
|
|
|
—
|
|
|
832
|
|
|
—
|
|
|
61,291
|
|
|
62,123
|
|
|||||
Balance at October 31, 2018
|
154,318,531
|
|
|
1,543
|
|
|
6,881,223
|
|
|
(5,780
|
)
|
|
(4,947,652
|
)
|
|
1,929,334
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
253,434
|
|
|
253,434
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,304
|
)
|
|
—
|
|
|
(16,304
|
)
|
|||||
Repurchases of common stock - repurchase program
|
(3,838,466
|
)
|
|
(38
|
)
|
|
(150,038
|
)
|
|
—
|
|
|
—
|
|
|
(150,076
|
)
|
|||||
Issuance of shares from employee equity plans
|
3,112,916
|
|
|
31
|
|
|
22,916
|
|
|
—
|
|
|
—
|
|
|
22,947
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
59,736
|
|
|
—
|
|
|
—
|
|
|
59,736
|
|
|||||
Settlement of debt conversion liability
|
1,585,140
|
|
|
16
|
|
|
52,928
|
|
|
—
|
|
|
—
|
|
|
52,944
|
|
|||||
Shares repurchased for tax withholdings on vesting of restricted stock units
|
(774,271
|
)
|
|
(8
|
)
|
|
(29,051
|
)
|
|
—
|
|
|
—
|
|
|
(29,059
|
)
|
|||||
Effect of adoption of new accounting standard (Note 1)
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
49,805
|
|
|
49,805
|
|
|||||
Balance at October 31, 2019
|
154,403,850
|
|
|
$
|
1,544
|
|
|
$
|
6,837,714
|
|
|
$
|
(22,084
|
)
|
|
$
|
(4,644,413
|
)
|
|
$
|
2,172,761
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Loss on extinguishment of debt
|
—
|
|
|
10,039
|
|
|
—
|
|
|||
Loss on fair value of debt conversion liability
|
—
|
|
|
12,070
|
|
|
—
|
|
|||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements
|
87,576
|
|
|
84,214
|
|
|
77,189
|
|
|||
Share-based compensation costs
|
59,736
|
|
|
52,972
|
|
|
48,360
|
|
|||
Amortization of intangible assets
|
35,136
|
|
|
25,806
|
|
|
45,713
|
|
|||
Deferred taxes
|
19,865
|
|
|
463,631
|
|
|
(1,126,732
|
)
|
|||
Provision for doubtful accounts
|
6,740
|
|
|
2,700
|
|
|
18,221
|
|
|||
Provision for inventory excess and obsolescence
|
28,085
|
|
|
30,615
|
|
|
35,459
|
|
|||
Provision for warranty
|
23,105
|
|
|
20,992
|
|
|
7,965
|
|
|||
Other
|
(910
|
)
|
|
21,685
|
|
|
22,417
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
65,712
|
|
|
(168,357
|
)
|
|
(66,123
|
)
|
|||
Inventories
|
(112,941
|
)
|
|
(27,445
|
)
|
|
(91,567
|
)
|
|||
Prepaid expenses and other
|
(96,618
|
)
|
|
(21,425
|
)
|
|
(33,834
|
)
|
|||
Accounts payable, accruals and other obligations
|
27,740
|
|
|
85,798
|
|
|
33,897
|
|
|||
Deferred revenue
|
16,480
|
|
|
(19,344
|
)
|
|
1,964
|
|
|||
Net cash provided by operating activities
|
413,140
|
|
|
229,261
|
|
|
234,882
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
||||||
Payments for equipment, furniture, fixtures and intellectual property
|
(62,579
|
)
|
|
(67,616
|
)
|
|
(94,600
|
)
|
|||
Purchase of available for sale securities
|
(158,074
|
)
|
|
(286,824
|
)
|
|
(299,038
|
)
|
|||
Proceeds from maturities of available for sale securities
|
248,748
|
|
|
410,109
|
|
|
335,075
|
|
|||
Purchase of equity investment
|
(2,667
|
)
|
|
(1,767
|
)
|
|
—
|
|
|||
Settlement of foreign currency forward contracts, net
|
(1,351
|
)
|
|
9,385
|
|
|
(2,810
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(82,670
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
24,077
|
|
|
(19,383
|
)
|
|
(61,373
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt, net
|
—
|
|
|
305,125
|
|
|
—
|
|
|||
Payment of long-term debt
|
(7,000
|
)
|
|
(292,730
|
)
|
|
(233,554
|
)
|
|||
Payment for debt conversion liability
|
(111,268
|
)
|
|
—
|
|
|
—
|
|
|||
Payment for make-whole provision upon conversion of long-term debt
|
—
|
|
|
(13,453
|
)
|
|
—
|
|
|||
Payment for modification of term loans
|
—
|
|
|
—
|
|
|
(93,625
|
)
|
|||
Payment of debt issuance costs
|
(1,191
|
)
|
|
(1,936
|
)
|
|
(722
|
)
|
|||
Payment of capital lease obligations
|
(3,319
|
)
|
|
(3,624
|
)
|
|
(3,562
|
)
|
|||
Shares repurchased for tax withholdings on vesting of restricted stock units
|
(29,059
|
)
|
|
(4,757
|
)
|
|
—
|
|
|||
Repurchases of common stock - repurchase program
|
(150,076
|
)
|
|
(110,981
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
22,947
|
|
|
23,127
|
|
|
20,412
|
|
|||
Net cash used in financing activities
|
(278,966
|
)
|
|
(99,229
|
)
|
|
(311,051
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
476
|
|
|
(5,856
|
)
|
|
494
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
158,727
|
|
|
104,793
|
|
|
(137,048
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of fiscal year
|
745,434
|
|
|
640,641
|
|
|
777,689
|
|
|||
Cash, cash equivalents and restricted cash at end of fiscal year
|
$
|
904,161
|
|
|
$
|
745,434
|
|
|
$
|
640,641
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the fiscal year for interest
|
$
|
39,579
|
|
|
$
|
44,750
|
|
|
$
|
47,235
|
|
Cash paid during the fiscal year for income taxes, net
|
$
|
33,570
|
|
|
$
|
26,900
|
|
|
$
|
22,136
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Purchase of equipment in accounts payable
|
$
|
16,549
|
|
|
$
|
5,118
|
|
|
$
|
6,214
|
|
Building subject to capital lease
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,370
|
|
Contingent consideration for acquisition of business
|
$
|
—
|
|
|
$
|
10,900
|
|
|
$
|
—
|
|
Conversion of 3.75% convertible senior notes, due October 15, 2018 (Original) into 3,038,208 shares of common stock
|
$
|
—
|
|
|
$
|
61,270
|
|
|
$
|
—
|
|
Conversion of 4.0% convertible senior notes, due December 15, 2020 into 9,197,943 shares of common stock, net
|
$
|
—
|
|
|
$
|
214,286
|
|
|
$
|
—
|
|
Conversion of debt conversion liability into 1,585,140 shares of common stock
|
$
|
52,944
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 inputs are quoted prices for identical or similar assets or liabilities in less active markets or model-derived valuations in which significant inputs are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and
|
•
|
Level 3 inputs are unobservable inputs based on Ciena’s assumptions used to measure assets and liabilities at fair value. The fair values are determined based on model-based techniques using inputs Ciena could not corroborated with market data.
|
|
|
Year Ended October 31, 2019
|
||||||||||
|
|
As Reported
|
|
Adjustments
|
|
Balances without adoption of ASC 606
|
||||||
Total revenue
|
|
$
|
3,572,131
|
|
|
$
|
(28,838
|
)
|
|
$
|
3,543,293
|
|
Total cost of goods sold
|
|
$
|
2,030,065
|
|
|
$
|
(21,330
|
)
|
|
$
|
2,008,735
|
|
Net income
|
|
$
|
253,434
|
|
|
$
|
(7,776
|
)
|
|
$
|
245,658
|
|
Diluted net income per potential common share
|
|
$
|
1.61
|
|
|
$
|
(0.05
|
)
|
|
$
|
1.56
|
|
(1)
|
Unpaid accounts receivable and related deferred revenue related to rights and obligations in a contract are interdependent and therefore recorded net within Ciena’s balance sheet. This represents an increase of $12.5 million from the reversal of certain net unpaid accounts receivable and related deferred revenue.
|
(2)
|
Represents a decrease of $2.5 million in deferred costs of goods sold due to change in revenue recognition for certain product sales.
|
(3)
|
Represents increases of $27.5 million in unbilled accounts receivable for change in recognizing revenue for installation services, $3.9 million in unbilled accounts receivable from change in recognizing revenue for certain product sales and $9.6 million related to short-term capitalized acquisition costs (e.g., commissions) and a decrease of $19.5 million related to prepaid cost of installation services.
|
(4)
|
Represents a decrease of $14.4 million in deferred tax asset, net, related to the unrecognized income tax effects of the net adjustments from the new revenue recognition standard.
|
(5)
|
Represents an increase of $4.0 million related to long-term capitalized acquisition costs (e.g., commissions).
|
(6)
|
Represents decreases of $23.6 million in deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and $1.7 million in deferred revenue, primarily due to a change in revenue recognition for certain product sales, and increases of $2.7 million for a change in revenue recognition from certain maintenance services and $8.2 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and deferred revenue.
|
(7)
|
Represents a decrease of $18.6 million in long-term deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and an increase of $4.3 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and long-term deferred revenue.
|
(8)
|
Accumulated deficit impact from the adjustments noted above.
|
|
Year Ended October 31, 2019
|
||||||||||||||||||
|
Networking Platforms
|
|
Platform Software and Services
|
|
Blue Planet Automation Software and Services
|
|
Global Services
|
|
Total
|
||||||||||
Product lines:
|
|
|
|
|
|
|
|
|
|
||||||||||
Converged Packet Optical
|
$
|
2,562,841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,562,841
|
|
Packet Networking
|
348,477
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
348,477
|
|
|||||
Platform Software and Services
|
—
|
|
|
155,376
|
|
|
—
|
|
|
—
|
|
|
155,376
|
|
|||||
Blue Planet Automation Software and Services
|
—
|
|
|
—
|
|
|
54,555
|
|
|
—
|
|
|
54,555
|
|
|||||
Maintenance Support and Training
|
—
|
|
|
—
|
|
|
—
|
|
|
261,337
|
|
|
261,337
|
|
|||||
Installation and Deployment
|
—
|
|
|
—
|
|
|
—
|
|
|
148,233
|
|
|
148,233
|
|
|||||
Consulting and Network Design
|
—
|
|
|
—
|
|
|
—
|
|
|
41,312
|
|
|
41,312
|
|
|||||
Total revenue by product line
|
$
|
2,911,318
|
|
|
$
|
155,376
|
|
|
$
|
54,555
|
|
|
$
|
450,882
|
|
|
$
|
3,572,131
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Timing of revenue recognition:
|
|
|
|
|
|
|
|
|
|
||||||||||
Products and services at a point in time
|
$
|
2,911,318
|
|
|
$
|
55,530
|
|
|
$
|
17,697
|
|
|
$
|
18,802
|
|
|
$
|
3,003,347
|
|
Products and services transferred over time
|
—
|
|
|
99,846
|
|
|
36,858
|
|
|
432,080
|
|
|
568,784
|
|
|||||
Total revenue by timing of revenue recognition
|
$
|
2,911,318
|
|
|
$
|
155,376
|
|
|
$
|
54,555
|
|
|
$
|
450,882
|
|
|
$
|
3,572,131
|
|
|
Year Ended October 31, 2019
|
||
Geographic Distribution:
|
|
||
North America
|
$
|
2,351,260
|
|
EMEA
|
566,718
|
|
|
CALA
|
152,653
|
|
|
APAC
|
501,500
|
|
|
Total revenue by geographic distribution
|
$
|
3,572,131
|
|
•
|
Networking Platforms reflects sales of Ciena’s Converged Packet Optical and Packet Networking product lines.
|
•
|
Converged Packet Optical - includes the 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, Waveserver® stackable interconnect system, the family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. This product line also includes sales of the Z-Series Packet-Optical Platform.
|
•
|
Packet Networking - includes the 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This product line also includes the 8700 Packetwave Platform, the Ethernet packet configuration for the 5410 Service Aggregation Switch, and the 6500 Packet Transport System (PTS), which combines packet switching, control plane operation, and integrated optics.
|
•
|
Platform Software and Services provides analytics, data, and planning tools to assist customers in managing Ciena’s Networking Platforms products in their networks. Ciena’s platform software includes its Manage, Control and Plan (MCP) domain controller solution, OneControl Unified Management System, ON-Center® Network and Service Management Suite, Ethernet Services Manager, Optical Suite Release and Planet Operate. Platform software-related services revenue includes sales of subscription, installation, support, and consulting services related to Ciena’s software platforms, operating system software and enhanced software features embedded in each of the Networking Platforms product lines above. Revenue from the software portion of this segment is included in product revenue on
|
•
|
Blue Planet Automation Software and Services which is a comprehensive, open software suite that allows customers to use enhanced knowledge about their networks to drive adaptive optimization of their services and operations. Ciena’s Blue Planet Automation Platform includes multi-domain service orchestration (MDSO), network function virtualization (NFV), management and orchestration (NFV MANO), analytics, network health predictor (NHP), route optimization and assurance (ROA), inventory management and Ciena’s SDN Multilayer Controller and virtual wide area network (V-WAN) application. Ciena acquired the NHP and ROA software solutions as a part of its acquisition of Packet Design, LLC (“Packet Design”). Ciena acquired the inventory management software solution as a part of its acquisition of DonRiver Holdings, LLC (“DonRiver”). Services revenue includes sales of subscription, installation, support, consulting and design services related to Ciena’s Blue Planet Automation Platform. Revenue from the software portion of this segment is included in product revenue on the Consolidated Statements of Operations. Revenue from services portions of this segment is included in services revenue on the Consolidated Statements of Operations.
|
•
|
Global Services reflects sales of a broad range of Ciena’s services for maintenance support and training, installation and deployment, and consulting and network design activities. Revenue from this segment is included in services revenue on the Consolidated Statements of Operations.
|
|
|
Balance at October 31, 2019
|
|
Adjusted Balance at November 1, 2018
|
||||
Accounts receivable, net
|
|
$
|
724,854
|
|
|
$
|
799,011
|
|
Contract assets
|
|
$
|
84,046
|
|
|
$
|
31,380
|
|
Deferred revenue
|
|
$
|
156,873
|
|
|
$
|
140,704
|
|
|
Amount
|
||
Cash
|
$
|
43,283
|
|
Contingent consideration
|
10,900
|
|
|
Total purchase price
|
$
|
54,183
|
|
|
Amount
|
||
Cash and cash equivalents
|
$
|
1,025
|
|
Accounts receivable
|
4,790
|
|
|
Prepaid expenses and other long term assets
|
372
|
|
|
Goodwill
|
10,453
|
|
|
Customer relationships and contracts
|
37,700
|
|
|
Developed technology
|
9,700
|
|
|
Deferred revenue
|
(193
|
)
|
|
Other current and long term liabilities
|
(9,664
|
)
|
|
Total purchase price
|
$
|
54,183
|
|
|
Amount
|
||
Cash and cash equivalents
|
$
|
642
|
|
Accounts receivable
|
1,525
|
|
|
Prepaid expenses and other
|
450
|
|
|
Equipment, furniture and fixtures
|
31
|
|
|
Goodwill
|
20,304
|
|
|
Customer relationships and contracts
|
2,200
|
|
|
Developed technology
|
21,900
|
|
|
Accounts payable
|
(165
|
)
|
|
Accrued liabilities
|
(657
|
)
|
|
Deferred revenue
|
(5,176
|
)
|
|
Total purchase price
|
$
|
41,054
|
|
|
Workforce
reduction
|
|
Consolidation
of excess
facilities
|
|
Total
|
||||||
Balance at October 31, 2016
|
$
|
868
|
|
|
$
|
1,970
|
|
|
$
|
2,838
|
|
Additional liability recorded
|
5,883
|
|
(1)
|
5,432
|
|
(4)
|
11,315
|
|
|||
Adjustment to previous estimates
|
—
|
|
|
(1,048
|
)
|
|
(1,048
|
)
|
|||
Cash payments
|
(5,460
|
)
|
|
(4,706
|
)
|
|
(10,166
|
)
|
|||
Balance at October 31, 2017
|
1,291
|
|
|
1,648
|
|
|
2,939
|
|
|||
Additional liability recorded
|
14,853
|
|
(2)
|
3,890
|
|
(5)
|
18,743
|
|
|||
Cash payments
|
(14,036
|
)
|
|
(3,799
|
)
|
|
(17,835
|
)
|
|||
Balance at October 31, 2018
|
2,108
|
|
|
1,739
|
|
|
3,847
|
|
|||
Additional liability recorded
|
13,779
|
|
(3)
|
10,759
|
|
(6)
|
24,538
|
|
|||
Cash payments
|
(11,904
|
)
|
|
(1,338
|
)
|
|
(13,242
|
)
|
|||
Balance at October 31, 2019
|
$
|
3,983
|
|
|
$
|
11,160
|
|
|
$
|
15,143
|
|
Current restructuring liabilities
|
$
|
3,983
|
|
|
$
|
1,484
|
|
|
$
|
5,467
|
|
Non-current restructuring liabilities
|
$
|
—
|
|
|
$
|
9,676
|
|
|
$
|
9,676
|
|
(1)
|
During fiscal 2017, Ciena recorded a charge of $5.9 million of severance and other employee-related costs associated with a workforce reduction of approximately 100 employees.
|
(2)
|
During fiscal 2018, Ciena recorded a charge of $14.9 million of severance and other employee-related costs associated with a workforce reduction of approximately 240 employees.
|
(3)
|
During fiscal 2019, Ciena recorded a charge of $13.8 million of severance and other employee-related costs associated with a workforce reduction of approximately 283 employees.
|
(4)
|
Reflects unfavorable lease commitments and relocation costs incurred in connection with Ciena’s research and development center facility transitions in Ottawa, Canada.
|
(5)
|
Reflects unfavorable lease commitments in connection with a portion of facilities located in Petaluma, California and in Gurgaon, India.
|
(6)
|
Reflects unfavorable lease commitments in connection with a portion of facilities located in Alpharetta, Georgia, Spokane, Washington, Durham, North Carolina and Hanover, Maryland.
|
|
|
Year Ended October 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Interest income
|
|
$
|
14,410
|
|
|
$
|
13,703
|
|
|
$
|
6,579
|
|
Gain (loss) on non-hedge designated foreign currency forward contracts
|
|
3
|
|
|
6,791
|
|
|
(1,198
|
)
|
|||
Foreign currency exchange losses
|
|
(9,800
|
)
|
|
(19,434
|
)
|
|
(4,376
|
)
|
|||
Loss on fair value of debt conversion liability
|
|
—
|
|
|
(12,070
|
)
|
|
—
|
|
|||
Other
|
|
(737
|
)
|
|
(1,019
|
)
|
|
(92
|
)
|
|||
Interest and other income (loss), net
|
|
$
|
3,876
|
|
|
$
|
(12,029
|
)
|
|
$
|
913
|
|
|
October 31, 2019
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
U.S. government obligations:
|
|
|
|
|
|
|
|
||||||||
Included in short-term investments
|
$
|
109,715
|
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
109,940
|
|
Included in long-term investments
|
10,017
|
|
|
—
|
|
|
(3
|
)
|
|
10,014
|
|
||||
|
$
|
119,732
|
|
|
$
|
225
|
|
|
$
|
(3
|
)
|
|
$
|
119,954
|
|
|
October 31, 2018
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Estimated Fair
Value |
||||||||
U.S. government obligations:
|
|
|
|
|
|
|
|
||||||||
Included in short-term investments
|
$
|
139,365
|
|
|
$
|
—
|
|
|
$
|
(347
|
)
|
|
$
|
139,018
|
|
Included in long-term investments
|
59,029
|
|
|
—
|
|
|
(59
|
)
|
|
58,970
|
|
||||
|
$
|
198,394
|
|
|
$
|
—
|
|
|
$
|
(406
|
)
|
|
$
|
197,988
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper:
|
|
|
|
|
|
|
|
||||||||
Included in short-term investments
|
$
|
9,963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,963
|
|
|
$
|
9,963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,963
|
|
|
October 31, 2019
|
||||||
|
Amortized Cost
|
|
Estimated Fair
Value |
||||
Less than one year
|
$
|
109,715
|
|
|
$
|
109,940
|
|
Due in 1-2 years
|
10,017
|
|
|
10,014
|
|
||
|
$
|
119,732
|
|
|
$
|
119,954
|
|
|
October 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
759,114
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
759,114
|
|
U.S. government obligations
|
—
|
|
|
119,954
|
|
|
—
|
|
|
119,954
|
|
||||
Foreign currency forward contracts
|
—
|
|
|
1,570
|
|
|
—
|
|
|
1,570
|
|
||||
Total assets measured at fair value
|
$
|
759,114
|
|
|
$
|
121,524
|
|
|
$
|
—
|
|
|
$
|
880,638
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Forward starting interest rate swaps
|
—
|
|
|
21,093
|
|
|
—
|
|
|
21,093
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
3,705
|
|
|
3,705
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
21,128
|
|
|
$
|
3,705
|
|
|
$
|
24,833
|
|
|
October 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
590,684
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
590,684
|
|
U.S. government obligations
|
—
|
|
|
197,988
|
|
|
—
|
|
|
197,988
|
|
||||
Commercial paper
|
—
|
|
|
69,888
|
|
|
—
|
|
|
69,888
|
|
||||
Foreign currency forward contracts
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
||||
Forward starting interest rate swaps
|
—
|
|
|
779
|
|
|
—
|
|
|
779
|
|
||||
Total assets measured at fair value
|
$
|
590,684
|
|
|
$
|
268,788
|
|
|
$
|
—
|
|
|
$
|
859,472
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
3,231
|
|
|
$
|
—
|
|
|
$
|
3,231
|
|
Debt conversion liability
|
—
|
|
|
164,212
|
|
|
—
|
|
|
164,212
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
10,900
|
|
|
10,900
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
167,443
|
|
|
$
|
10,900
|
|
|
$
|
178,343
|
|
|
October 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
759,114
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
759,114
|
|
Short-term investments
|
—
|
|
|
109,940
|
|
|
—
|
|
|
109,940
|
|
||||
Prepaid expenses and other
|
—
|
|
|
1,570
|
|
|
—
|
|
|
1,570
|
|
||||
Long-term investments
|
—
|
|
|
10,014
|
|
|
—
|
|
|
10,014
|
|
||||
Total assets measured at fair value
|
$
|
759,114
|
|
|
$
|
121,524
|
|
|
$
|
—
|
|
|
$
|
880,638
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Other long-term obligations
|
—
|
|
|
21,093
|
|
|
3,705
|
|
|
24,798
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
21,128
|
|
|
$
|
3,705
|
|
|
$
|
24,833
|
|
|
October 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
590,684
|
|
|
$
|
59,925
|
|
|
$
|
—
|
|
|
$
|
650,609
|
|
Short-term investments
|
—
|
|
|
148,981
|
|
|
—
|
|
|
148,981
|
|
||||
Prepaid expenses and other
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
||||
Long-term investments
|
—
|
|
|
58,970
|
|
|
—
|
|
|
58,970
|
|
||||
Other long-term assets
|
—
|
|
|
779
|
|
|
—
|
|
|
779
|
|
||||
Total assets measured at fair value
|
$
|
590,684
|
|
|
$
|
268,788
|
|
|
$
|
—
|
|
|
$
|
859,472
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
$
|
—
|
|
|
$
|
3,231
|
|
|
$
|
—
|
|
|
$
|
3,231
|
|
Debt conversion liability
|
—
|
|
|
164,212
|
|
|
—
|
|
|
164,212
|
|
||||
Other long-term obligations
|
—
|
|
|
—
|
|
|
10,900
|
|
|
10,900
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
167,443
|
|
|
$
|
10,900
|
|
|
$
|
178,343
|
|
Year ended
|
|
Beginning
|
|
|
|
Net
|
|
Ending
|
||||||||
October 31,
|
|
Balance
|
|
Provisions
|
|
Deductions
|
|
Balance
|
||||||||
2017
|
|
$
|
3,963
|
|
|
$
|
18,221
|
|
|
$
|
4,604
|
|
|
$
|
17,580
|
|
2018
|
|
$
|
17,580
|
|
|
$
|
2,700
|
|
|
$
|
2,902
|
|
|
$
|
17,378
|
|
2019
|
|
$
|
17,378
|
|
|
$
|
6,740
|
|
|
$
|
4,017
|
|
|
$
|
20,101
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
99,041
|
|
|
$
|
67,468
|
|
Work-in-process
|
13,657
|
|
|
9,589
|
|
||
Finished goods
|
226,622
|
|
|
188,575
|
|
||
Deferred cost of goods sold
|
53,051
|
|
|
48,057
|
|
||
|
392,371
|
|
|
313,689
|
|
||
Reserve for excess and obsolescence
|
(47,322
|
)
|
|
(50,938
|
)
|
||
|
$
|
345,049
|
|
|
$
|
262,751
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended
|
|
Beginning
|
|
|
|
|
|
Ending
|
||||||||
October 31,
|
|
Balance
|
|
Provisions
|
|
Disposals
|
|
Balance
|
||||||||
2017
|
|
$
|
62,503
|
|
|
$
|
35,459
|
|
|
$
|
46,756
|
|
|
$
|
51,206
|
|
2018
|
|
$
|
51,206
|
|
|
$
|
30,615
|
|
|
$
|
30,883
|
|
|
$
|
50,938
|
|
2019
|
|
$
|
50,938
|
|
|
$
|
28,085
|
|
|
$
|
31,701
|
|
|
$
|
47,322
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Prepaid VAT and other taxes
|
$
|
84,706
|
|
|
$
|
82,518
|
|
Contract assets
|
84,046
|
|
|
—
|
|
||
Prepaid expenses
|
48,680
|
|
|
32,987
|
|
||
Product demonstration equipment, net
|
38,900
|
|
|
37,623
|
|
||
Other non-trade receivables
|
28,136
|
|
|
25,716
|
|
||
Capitalized contract acquisition costs
|
11,677
|
|
|
—
|
|
||
Derivative assets
|
1,570
|
|
|
133
|
|
||
Deferred deployment expense
|
125
|
|
|
19,342
|
|
||
Restricted cash
|
74
|
|
|
—
|
|
||
Financing receivable
|
—
|
|
|
626
|
|
||
|
$
|
297,914
|
|
|
$
|
198,945
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Equipment, furniture and fixtures
|
$
|
544,012
|
|
|
$
|
504,714
|
|
Building subject to capital lease
|
71,760
|
|
|
71,968
|
|
||
Leasehold improvements
|
94,626
|
|
|
94,195
|
|
||
|
710,398
|
|
|
670,877
|
|
||
Accumulated depreciation and amortization
|
(423,514
|
)
|
|
(378,810
|
)
|
||
|
$
|
286,884
|
|
|
$
|
292,067
|
|
|
October 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
|
Gross
Intangible
|
|
Accumulated
Amortization
|
|
Net
Intangible
|
|
Gross
Intangible
|
|
Accumulated
Amortization
|
|
Net
Intangible
|
||||||||||||
Developed technology
|
$
|
373,526
|
|
|
$
|
(308,261
|
)
|
|
$
|
65,265
|
|
|
$
|
373,581
|
|
|
$
|
(285,233
|
)
|
|
$
|
88,348
|
|
Patents and licenses
|
3,565
|
|
|
(2,244
|
)
|
|
1,321
|
|
|
3,565
|
|
|
(1,958
|
)
|
|
1,607
|
|
||||||
Customer relationships, covenants not to compete, outstanding purchase orders and contracts
|
374,381
|
|
|
(328,186
|
)
|
|
46,195
|
|
|
374,620
|
|
|
(316,350
|
)
|
|
58,270
|
|
||||||
Total intangible assets
|
$
|
751,472
|
|
|
$
|
(638,691
|
)
|
|
$
|
112,781
|
|
|
$
|
751,766
|
|
|
$
|
(603,541
|
)
|
|
$
|
148,225
|
|
Year Ended October 31,
|
|
||
2020
|
$
|
34,008
|
|
2021
|
30,830
|
|
|
2022
|
24,809
|
|
|
2023
|
10,000
|
|
|
2024
|
6,948
|
|
|
Thereafter
|
6,186
|
|
|
|
$
|
112,781
|
|
|
Balance at October 31, 2018
|
|
Reallocation
|
|
Acquisitions
|
|
Impairments
|
|
Translation
|
|
Balance at October 31, 2019
|
||||||||||||
Software and Software Related Services
|
$
|
232,185
|
|
|
$
|
(232,185
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Platform Software and Services
|
—
|
|
|
156,191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156,191
|
|
||||||
Blue Planet Automation Software and Services
|
—
|
|
|
75,994
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,994
|
|
||||||
Networking Platforms
|
65,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
65,752
|
|
||||||
Total
|
$
|
297,968
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
297,937
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Maintenance spares inventory, net
|
$
|
55,482
|
|
|
$
|
45,679
|
|
Cost method investments
|
10,727
|
|
|
8,056
|
|
||
Capitalized contract acquisition costs
|
3,994
|
|
|
—
|
|
||
Deferred debt issuance costs, net (1)
|
1,609
|
|
|
720
|
|
||
Restricted cash
|
42
|
|
|
11
|
|
||
Forward starting interest rate swaps
|
—
|
|
|
779
|
|
||
Other
|
17,132
|
|
|
16,407
|
|
||
|
$
|
88,986
|
|
|
$
|
71,652
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Compensation, payroll related tax and benefits
|
$
|
182,363
|
|
|
$
|
140,277
|
|
Warranty
|
48,498
|
|
|
44,740
|
|
||
Vacation (1)
|
22,290
|
|
|
42,507
|
|
||
Contingent Consideration
|
4,372
|
|
|
—
|
|
||
Capital lease obligations
|
2,764
|
|
|
3,547
|
|
||
Interest payable
|
1,007
|
|
|
1,072
|
|
||
Other
|
121,446
|
|
|
107,932
|
|
||
|
$
|
382,740
|
|
|
$
|
340,075
|
|
Year ended
|
|
Beginning
|
|
Current Year
|
|
|
|
Ending
|
||||||||
October 31,
|
|
Balance
|
|
Provisions (1)
|
|
Settlements
|
|
Balance
|
||||||||
2017
|
|
$
|
52,324
|
|
|
$
|
7,965
|
|
|
$
|
17,833
|
|
|
$
|
42,456
|
|
2018
|
|
$
|
42,456
|
|
|
$
|
20,992
|
|
|
$
|
18,708
|
|
|
$
|
44,740
|
|
2019
|
|
$
|
44,740
|
|
|
$
|
23,105
|
|
|
$
|
19,347
|
|
|
$
|
48,498
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Products
|
$
|
27,366
|
|
|
$
|
42,474
|
|
Services
|
129,507
|
|
|
126,983
|
|
||
|
156,873
|
|
|
169,457
|
|
||
Less current portion
|
(111,381
|
)
|
|
(111,134
|
)
|
||
Long-term deferred revenue
|
$
|
45,492
|
|
|
$
|
58,323
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Capital lease obligations
|
$
|
65,284
|
|
|
$
|
68,245
|
|
Income tax liability
|
20,546
|
|
|
15,894
|
|
||
Interest rate swap liability
|
21,093
|
|
|
—
|
|
||
Deferred tenant allowance
|
6,248
|
|
|
7,244
|
|
||
Straight-line rent
|
5,434
|
|
|
6,750
|
|
||
Contingent consideration
|
3,705
|
|
|
10,900
|
|
||
Other
|
26,437
|
|
|
10,380
|
|
||
|
$
|
148,747
|
|
|
$
|
119,413
|
|
Year Ending October 31,
|
Amount
|
||
2020
|
$
|
7,652
|
|
2021
|
7,547
|
|
|
2022
|
7,860
|
|
|
2023
|
8,067
|
|
|
2024
|
8,067
|
|
|
Thereafter
|
67,126
|
|
|
Net minimum capital lease payments
|
106,319
|
|
|
Less: Amount representing interest
|
(38,271
|
)
|
|
Present value of minimum lease payments
|
68,048
|
|
|
Less: Current portion of present value of minimum lease payments
|
(2,764
|
)
|
|
Long-term portion of present value of minimum lease payments
|
$
|
65,284
|
|
|
|
Unrealized Gain/(Loss) on Available-for-Sale Securities
|
|
Unrealized Gain/(Loss) on Foreign Currency Forward Contracts
|
|
Unrealized Gain/(Loss) on Forward Starting Interest Rate Swaps
|
|
Cumulative Foreign Currency Translation Adjustment
|
|
Total
|
||||||||||
Balance at October 31, 2016
|
|
$
|
139
|
|
|
$
|
(1,091
|
)
|
|
$
|
(5,967
|
)
|
|
$
|
(17,410
|
)
|
|
$
|
(24,329
|
)
|
Other comprehensive gain (loss) before reclassifications
|
|
(590
|
)
|
|
1,290
|
|
|
3,669
|
|
|
8,012
|
|
|
12,381
|
|
|||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(1,585
|
)
|
|
2,516
|
|
|
—
|
|
|
931
|
|
|||||
Balance at October 31, 2017
|
|
(451
|
)
|
|
(1,386
|
)
|
|
218
|
|
|
(9,398
|
)
|
|
(11,017
|
)
|
|||||
Other comprehensive gain (loss) before reclassifications
|
|
26
|
|
|
(3,242
|
)
|
|
6,011
|
|
|
686
|
|
|
3,481
|
|
|||||
Amounts reclassified from AOCI
|
|
—
|
|
|
1,568
|
|
|
188
|
|
|
—
|
|
|
1,756
|
|
|||||
Balance at October 31, 2018
|
|
(425
|
)
|
|
(3,060
|
)
|
|
6,417
|
|
|
(8,712
|
)
|
|
(5,780
|
)
|
|||||
Other comprehensive gain (loss) before reclassifications
|
|
577
|
|
|
14
|
|
|
(18,948
|
)
|
|
(763
|
)
|
|
(19,120
|
)
|
|||||
Amounts reclassified from AOCI
|
|
—
|
|
|
3,971
|
|
|
(1,155
|
)
|
|
—
|
|
|
2,816
|
|
|||||
Balance at October 31, 2019
|
|
$
|
152
|
|
|
$
|
925
|
|
|
$
|
(13,686
|
)
|
|
$
|
(9,475
|
)
|
|
$
|
(22,084
|
)
|
|
|
October 31, 2019
|
|
October 31, 2018
|
||||||||||||||||
|
|
Principal Balance
|
|
Unamortized Discount
|
|
Deferred Debt Issuance Costs
|
|
Net Carrying Value
|
|
Net Carrying Value
|
||||||||||
Term Loan Payable due September 28, 2025
|
|
$
|
693,000
|
|
|
$
|
(1,958
|
)
|
|
$
|
(3,636
|
)
|
|
$
|
687,406
|
|
|
$
|
693,450
|
|
•
|
amortize in equal quarterly installments in aggregate amounts equal to 0.25% of the principal amount of the 2025 Term Loan as of September 28, 2018, with the balance payable at maturity;
|
•
|
be subject to mandatory prepayment provisions upon the occurrence of certain specified events substantially similar to the 2022 Term Loan, including certain asset sales, debt issuances and receipt of annual Excess Cash Flow (as defined in the Credit Agreement);
|
•
|
bear interest, at Ciena’s election, at a per annum rate equal to (a) LIBOR (subject to a floor of 0.00%) plus an applicable margin of 2.00%, or (b) a base rate (subject to a floor of 1.00%) plus an applicable margin of 1.00%; and
|
•
|
be repayable at any time at Ciena’s election, provided that repayment of the 2025 Term Loan with proceeds of certain indebtedness prior to March 28, 2019 will require a prepayment premium of 1.00% of the aggregate principal amount of such prepayment.
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
Less: Loss on fair value of debt conversion liability
|
|
|
|
(12,894
|
)
|
|
—
|
|
|||
Add: Interest expense associated with 0.875% Convertible Senior Notes due 2017
|
—
|
|
|
—
|
|
|
853
|
|
|||
Add: Interest expense associated with 3.75% Convertible Senior Notes due 2018 (Original Notes)
|
—
|
|
|
—
|
|
|
7,224
|
|
|||
Add: Interest expense associated with 4.0% Convertible Senior Notes due 2020
|
—
|
|
|
—
|
|
|
8,691
|
|
|||
Net income (loss) used to calculate Diluted EPS
|
$
|
253,434
|
|
|
$
|
(357,584
|
)
|
|
$
|
1,278,721
|
|
|
Year Ended October 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Basic weighted average shares outstanding
|
155,720
|
|
|
143,738
|
|
|
141,997
|
|
Add: Shares underlying outstanding stock options, employee stock purchase plan and restricted stock units
|
1,892
|
|
|
—
|
|
|
1,354
|
|
Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New Notes)
|
—
|
|
|
—
|
|
|
404
|
|
Add: Shares underlying 0.875% Convertible Senior Notes due 2017
|
—
|
|
|
—
|
|
|
3,032
|
|
Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (Original Notes)
|
—
|
|
|
—
|
|
|
13,934
|
|
Add: Shares underlying 4.0% Convertible Senior Notes due 2020
|
—
|
|
|
—
|
|
|
9,198
|
|
Diluted weighted average shares outstanding
|
157,612
|
|
|
143,738
|
|
|
169,919
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Basic EPS
|
$
|
1.63
|
|
|
$
|
(2.40
|
)
|
|
$
|
8.89
|
|
Diluted EPS
|
$
|
1.61
|
|
|
$
|
(2.49
|
)
|
|
$
|
7.53
|
|
|
Year Ended October 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
||||
Shares underlying stock options and restricted stock units
|
234
|
|
|
2,235
|
|
|
958
|
|
|
Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New Notes)
|
—
|
|
|
1,780
|
|
—
|
|
—
|
|
3.75% Convertible Senior Notes due October 15, 2018 (Original Notes)
|
—
|
|
|
2,883
|
|
|
—
|
|
|
4.0% Convertible Senior Notes due December 15, 2020
|
—
|
|
|
9,123
|
|
|
—
|
|
|
Total shares excluded due to anti-dilutive effect
|
234
|
|
|
16,021
|
|
|
958
|
|
|
Shares Repurchased
|
|
Weighted-Average Price per Share
|
|
Amount Repurchased (in thousands)
|
|||||
Cumulative balance at October 31, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Repurchase of common stock under the stock repurchase program
|
3,838,466
|
|
|
$
|
39.10
|
|
|
150,076
|
|
|
Cumulative balance at October 31, 2019
|
3,838,466
|
|
|
$
|
39.10
|
|
|
$
|
150,076
|
|
|
Year Ended October 31,
|
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||||
Current:
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
13,143
|
|
|
$
|
8,327
|
|
|
$
|
—
|
|
|
||
State
|
16,945
|
|
|
8,219
|
|
|
6,342
|
|
|
|||||
Foreign
|
9,816
|
|
|
13,294
|
|
|
14,563
|
|
|
|||||
Total current
|
39,904
|
|
|
29,840
|
|
|
20,905
|
|
|
|||||
Deferred:
|
|
|
|
|
|
|
||||||||
Federal
|
31,872
|
|
|
475,951
|
|
(1
|
)
|
(1,047,699
|
)
|
(1
|
)
|
|||
State
|
(9,159
|
)
|
|
(8,202
|
)
|
|
(77,429
|
)
|
(1
|
)
|
||||
Foreign
|
(2,861
|
)
|
|
(4,118
|
)
|
|
(1,604
|
)
|
|
|||||
Total deferred
|
19,852
|
|
|
463,631
|
|
|
(1,126,732
|
)
|
|
|||||
Provision (benefit) for income taxes
|
$
|
59,756
|
|
|
$
|
493,471
|
|
|
$
|
(1,105,827
|
)
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
256,461
|
|
|
$
|
106,972
|
|
|
$
|
114,242
|
|
Foreign
|
56,729
|
|
|
41,809
|
|
|
41,884
|
|
|||
Total
|
$
|
313,190
|
|
|
$
|
148,781
|
|
|
$
|
156,126
|
|
|
Year Ended October 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Provision at statutory rate
|
21.00
|
%
|
|
23.41
|
%
|
|
35.00
|
%
|
Deferred tax assets remeasurement
|
—
|
%
|
|
294.56
|
%
|
|
—
|
%
|
Base Erosion and Anti-Abuse Tax
|
3.60
|
%
|
|
—
|
%
|
|
—
|
%
|
State taxes
|
2.18
|
%
|
|
(0.16
|
)%
|
|
2.29
|
%
|
Foreign taxes
|
(0.37
|
)%
|
|
1.22
|
%
|
|
(0.35
|
)%
|
Research and development credit
|
(7.53
|
)%
|
|
(8.80
|
)%
|
|
(15.38
|
)%
|
Non-deductible compensation
|
1.01
|
%
|
|
3.39
|
%
|
|
3.45
|
%
|
Fair value of debt conversion liability
|
—
|
%
|
|
1.90
|
%
|
|
—
|
%
|
Transition tax
|
0.29
|
%
|
|
23.23
|
%
|
|
—
|
%
|
Valuation allowance
|
(2.13
|
)%
|
|
(11.95
|
)%
|
|
(739.97
|
)%
|
Other
|
1.03
|
%
|
|
4.88
|
%
|
|
6.67
|
%
|
Effective income tax rate
|
19.08
|
%
|
|
331.68
|
%
|
|
(708.29
|
)%
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Reserves and accrued liabilities
|
$
|
54,183
|
|
|
$
|
40,959
|
|
Depreciation and amortization
|
455,007
|
|
|
353,838
|
|
||
NOL and credit carry forward
|
302,325
|
|
|
483,495
|
|
||
Other
|
39,405
|
|
|
9,397
|
|
||
Gross deferred tax assets
|
850,920
|
|
|
887,689
|
|
||
Valuation allowance
|
(135,978
|
)
|
|
(142,650
|
)
|
||
Deferred tax asset, net of valuation allowance
|
$
|
714,942
|
|
|
$
|
745,039
|
|
|
Amount
|
||
Unrecognized tax benefits at October 31, 2016
|
$
|
30,668
|
|
Increase related to positions taken in prior period
|
122
|
|
|
Increase related to positions taken in current period
|
111,412
|
|
|
Reductions related to expiration of statute of limitations
|
(620
|
)
|
|
Unrecognized tax benefits at October 31, 2017
|
141,582
|
|
|
Decrease related to positions taken in prior period
|
(46,400
|
)
|
|
Increase related to positions taken in current period
|
2,482
|
|
|
Reductions related to expiration of statute of limitations
|
(1,301
|
)
|
|
Unrecognized tax benefits at October 31, 2018
|
96,363
|
|
|
Increase related to positions taken in prior period
|
1,959
|
|
|
Reductions related to settlements with taxing authorities
|
(1,224
|
)
|
|
Reductions related to expiration of statute of limitations
|
(2,494
|
)
|
|
Unrecognized tax benefits at October 31, 2019
|
$
|
94,604
|
|
Year ended
|
|
Beginning
|
|
|
|
|
|
Ending
|
||||||||
October 31,
|
|
Balance
|
|
Additions
|
|
Deductions
|
|
Balance
|
||||||||
2017
|
|
$
|
1,489,780
|
|
|
$
|
—
|
|
|
$
|
1,303,882
|
|
|
$
|
185,898
|
|
2018
|
|
$
|
185,898
|
|
|
$
|
23,720
|
|
|
$
|
66,968
|
|
|
$
|
142,650
|
|
2019
|
|
$
|
142,650
|
|
|
$
|
27,459
|
|
|
$
|
34,131
|
|
|
$
|
135,978
|
|
|
Shares Underlying
Options
Outstanding
|
|
Weighted
Average
Exercise Price
|
|||
Balance as of October 31, 2018
|
276
|
|
|
$
|
33.52
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(50
|
)
|
|
$
|
24.13
|
|
Canceled
|
(6
|
)
|
|
$
|
37.03
|
|
Balance as of October 31, 2019
|
220
|
|
|
$
|
35.54
|
|
|
|
|
|
|
|
Options Outstanding and Vested at
|
||||||||||||||||
|
|
|
|
|
|
October 31, 2019
|
||||||||||||||||
|
|
|
|
|
|
Number
|
|
Weighted
Average
Remaining
|
|
Weighted
|
|
|
||||||||||
Range of
|
|
of
|
|
Contractual
|
|
Average
|
|
Aggregate
|
||||||||||||||
Exercise
|
|
Underlying
|
|
Life
|
|
Exercise
|
|
Intrinsic
|
||||||||||||||
Price
|
|
Shares
|
|
(Years)
|
|
Price
|
|
Value
|
||||||||||||||
$
|
6.43
|
|
|
—
|
|
|
$
|
10.50
|
|
|
4
|
|
|
0.81
|
|
$
|
8.42
|
|
|
$
|
117
|
|
$
|
11.34
|
|
|
—
|
|
|
$
|
15.67
|
|
|
49
|
|
|
2.79
|
|
$
|
13.51
|
|
|
1,123
|
|
|
$
|
17.50
|
|
|
—
|
|
|
$
|
19.25
|
|
|
11
|
|
|
4.6
|
|
$
|
18.17
|
|
|
202
|
|
|
$
|
32.06
|
|
|
—
|
|
|
$
|
37.10
|
|
|
31
|
|
|
3.27
|
|
$
|
36.04
|
|
|
28
|
|
|
$
|
41.52
|
|
|
—
|
|
|
$
|
55.63
|
|
|
125
|
|
|
3.48
|
|
$
|
46.47
|
|
|
—
|
|
|
$
|
6.43
|
|
|
—
|
|
|
$
|
55.63
|
|
|
220
|
|
|
3.30
|
|
$
|
35.54
|
|
|
$
|
1,470
|
|
|
Year Ended October 31,
|
||
|
2019
|
|
2018
|
Expected volatility of Ciena common stock, which is a weighted average of implied volatility and historical volatility
|
34.10%
|
|
34.93%
|
Historical volatility of Ciena common stock
|
36.80%
|
|
38.24%
|
Historical volatility of S&P Networking Index
|
17.39%
|
|
17.14%
|
Correlation coefficient
|
0.6251
|
|
0.6597
|
Expected life in years
|
2.87
|
|
2.89
|
Risk-free interest rate
|
2.62%
|
|
1.94%
|
Expected dividend yield
|
0.0%
|
|
0.0%
|
|
Restricted
Stock Units
Outstanding
|
|
Weighted
Average
Grant Date
Fair Value
Per Share
|
|
Aggregate Fair
Value
|
|||||
Balance as of October 31, 2018
|
4,402
|
|
|
$
|
22.26
|
|
|
$
|
140,943
|
|
Granted
|
2,057
|
|
|
|
|
|
||||
Vested
|
(2,101
|
)
|
|
|
|
|
||||
Canceled or forfeited
|
(348
|
)
|
|
|
|
|
||||
Balance as of October 31, 2019
|
4,010
|
|
|
$
|
27.94
|
|
|
$
|
146,091
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Product cost of goods sold
|
$
|
2,868
|
|
|
$
|
2,984
|
|
|
$
|
2,672
|
|
Service cost of goods sold
|
3,175
|
|
|
2,616
|
|
|
2,487
|
|
|||
Share-based compensation expense included in cost of goods sold
|
6,043
|
|
|
5,600
|
|
|
5,159
|
|
|||
Research and development
|
14,321
|
|
|
13,518
|
|
|
12,957
|
|
|||
Sales and marketing
|
16,474
|
|
|
14,246
|
|
|
12,846
|
|
|||
General and administrative
|
22,841
|
|
|
19,709
|
|
|
17,321
|
|
|||
Share-based compensation expense included in operating expense
|
53,636
|
|
|
47,473
|
|
|
43,124
|
|
|||
Share-based compensation expense capitalized in inventory, net
|
57
|
|
|
(101
|
)
|
|
77
|
|
|||
Total share-based compensation
|
$
|
59,736
|
|
|
$
|
52,972
|
|
|
$
|
48,360
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Networking Platforms
|
|
|
|
|
|
||||||
Converged Packet Optical
|
$
|
2,562,841
|
|
|
$
|
2,194,519
|
|
|
$
|
1,939,621
|
|
Packet Networking
|
348,477
|
|
|
283,499
|
|
|
313,089
|
|
|||
Total Networking Platforms
|
2,911,318
|
|
|
2,478,018
|
|
|
2,252,710
|
|
|||
|
|
|
|
|
|
||||||
Platform Software and Services
|
155,376
|
|
|
173,949
|
|
|
145,009
|
|
|||
|
|
|
|
|
|
||||||
Blue Planet Automation Software and Services
|
54,555
|
|
|
26,764
|
|
|
16,110
|
|
|||
|
|
|
|
|
|
||||||
Global Services
|
|
|
|
|
|
||||||
Maintenance Support and Training
|
261,337
|
|
|
245,161
|
|
|
227,400
|
|
|||
Installation and Deployment
|
148,233
|
|
|
128,829
|
|
|
117,524
|
|
|||
Consulting and Network Design
|
41,312
|
|
|
41,565
|
|
|
42,934
|
|
|||
Total Global Services
|
450,882
|
|
|
415,555
|
|
|
387,858
|
|
|||
|
|
|
|
|
|
||||||
Total revenue
|
$
|
3,572,131
|
|
|
$
|
3,094,286
|
|
|
$
|
2,801,687
|
|
|
Year Ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Segment profit (loss):
|
|
|
|
|
|
||||||
Networking Platforms
|
$
|
759,244
|
|
|
$
|
581,113
|
|
|
$
|
578,039
|
|
Platform Software and Services
|
64,210
|
|
|
78,048
|
|
|
47,353
|
|
|||
Blue Planet Automation Software and Services
|
(17,769
|
)
|
|
(8,240
|
)
|
|
(14,817
|
)
|
|||
Global Services
|
188,242
|
|
|
172,205
|
|
|
159,882
|
|
|||
Total segment profit
|
993,927
|
|
|
823,126
|
|
|
770,457
|
|
|||
Less: non-performance operating expenses
|
|
|
|
|
|
||||||
Selling and marketing
|
423,046
|
|
|
394,060
|
|
|
356,169
|
|
|||
General and administrative
|
174,399
|
|
|
160,133
|
|
|
142,604
|
|
|||
Amortization of intangible assets
|
21,808
|
|
|
15,737
|
|
|
33,029
|
|
|||
Acquisition and integration costs
|
3,370
|
|
|
5,111
|
|
|
—
|
|
|||
Significant asset impairments and restructuring costs
|
24,538
|
|
|
18,139
|
|
|
23,933
|
|
|||
Add: other non-performance financial items
|
|
|
|
|
|
||||||
Interest and other income (loss), net
|
3,876
|
|
|
(12,029
|
)
|
|
913
|
|
|||
Interest expense
|
(37,452
|
)
|
|
(55,249
|
)
|
|
(55,852
|
)
|
|||
Loss on extinguishment and modification of debt
|
—
|
|
|
(13,887
|
)
|
|
(3,657
|
)
|
|||
Less: Provision (benefit) for income taxes
|
59,756
|
|
|
493,471
|
|
|
(1,105,827
|
)
|
|||
Total net income (loss)
|
$
|
253,434
|
|
|
$
|
(344,690
|
)
|
|
$
|
1,261,953
|
|
|
October 31,
|
||||||
|
2019
|
|
2018
|
||||
Canada
|
$
|
211,901
|
|
|
$
|
198,028
|
|
United States
|
58,119
|
|
|
75,479
|
|
||
Other International
|
16,864
|
|
|
18,560
|
|
||
Total
|
$
|
286,884
|
|
|
$
|
292,067
|
|
|
October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Verizon
|
$
|
459,787
|
|
|
$
|
318,013
|
|
|
$
|
288,048
|
|
AT&T
|
388,704
|
|
|
374,576
|
|
|
448,943
|
|
|||
Web-scale provider
|
370,577
|
|
|
n/a
|
|
|
n/a
|
|
|||
Total
|
$
|
1,219,068
|
|
|
$
|
692,589
|
|
|
$
|
736,991
|
|
n/a
|
Denotes revenue representing less than 10% of total revenue for the period
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
|
$
|
28,776
|
|
|
$
|
24,184
|
|
|
$
|
16,767
|
|
|
$
|
13,393
|
|
|
$
|
10,632
|
|
|
$
|
26,110
|
|
|
$
|
119,862
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Ciena Corporation;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America;
|
•
|
provide reasonable assurance that receipts and expenditures of Ciena Corporation are being made only in accordance with authorization of management and directors of Ciena Corporation; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
|
/s/ Gary B. Smith
|
|
/s/ James E. Moylan, Jr.
|
|
Gary B. Smith
|
|
James E. Moylan, Jr.
|
|
President and Chief Executive Officer
|
|
Senior Vice President and Chief Financial Officer
|
|
December 20, 2019
|
|
December 20, 2019
|
|
(a)
|
1. The information required by this item is included in Item 8 of Part II of this annual report.
|
2.
|
The information required by this item is included in Item 8 of Part II of this annual report.
|
3.
|
Exhibits: See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed herewith or incorporated by reference as part of this annual report.
|
(b)
|
Exhibits. See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed herewith or incorporated by reference as part of this annual report.
|
(c)
|
Not applicable.
|
Ciena Corporation
|
|
||
By:
|
/s/ Gary B. Smith
|
|
|
Gary B. Smith
|
|
||
President, Chief Executive Officer and Director
|
|
||
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Patrick H. Nettles, Ph.D.
|
|
Executive Chairman of the Board of Directors
|
|
December 20, 2019
|
Patrick H. Nettles, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ Gary B. Smith
|
|
President, Chief Executive Officer and Director
|
|
December 20, 2019
|
Gary B. Smith
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ James E. Moylan, Jr.
|
|
Sr. Vice President, Finance and Chief Financial Officer
|
|
December 20, 2019
|
James E. Moylan, Jr.
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Andrew C. Petrik
|
|
Vice President, Controller
|
|
December 20, 2019
|
Andrew C. Petrik
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Bruce L. Claflin
|
|
Director
|
|
December 20, 2019
|
Bruce L. Claflin
|
|
|
|
|
|
|
|
|
|
/s/ Lawton W. Fitt
|
|
Director
|
|
December 20, 2019
|
Lawton W. Fitt
|
|
|
|
|
|
|
|
|
|
/s/ Patrick T. Gallagher
|
|
Director
|
|
December 20, 2019
|
Patrick T. Gallagher
|
|
|
|
|
|
|
|
|
|
/s/ Devinder Kumar
|
|
Director
|
|
December 20, 2019
|
Devinder Kumar
|
|
|
|
|
|
|
|
|
|
/s/ T. Michael Nevens
|
|
Director
|
|
December 20, 2019
|
T. Michael Nevens
|
|
|
|
|
|
|
|
|
|
/s/ Judith M. O’Brien
|
|
Director
|
|
December 20, 2019
|
Judith M. O’Brien
|
|
|
|
|
|
|
|
|
|
/s/ Joanne B. Olsen
|
|
Director
|
|
December 20, 2019
|
Joanne B. Olsen
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
|
|
|
|
Form and
|
|
|
|
|
|
Filed
|
Exhibit
|
|
|
|
Registration or
|
|
|
|
|
|
Here-
|
Number
|
|
Exhibit Description
|
|
Commission No.
|
|
Exhibit
|
|
Filing Date
|
|
with (X)
|
3.1
|
|
|
8-K (000-21969)
|
|
3.1
|
|
3/27/2008
|
|
|
|
3.2
|
|
|
8-K (001-36250)
|
|
3.1
|
|
1/27/2017
|
|
|
|
4.1
|
|
|
10-K (000-21969)
|
|
4.1
|
|
12/27/2007
|
|
|
|
10.1
|
|
|
8-K (001-36250)
|
|
10.1
|
|
3/29/2017
|
|
|
|
10.2
|
|
|
10-K (001-36250)
|
|
10.2
|
|
12/21/2018
|
|
|
|
10.3
|
|
|
10-K (001-36250)
|
|
10.3
|
|
12/21/2018
|
|
|
|
10.4
|
|
|
10-K (001-36250)
|
|
10.4
|
|
12/21/2018
|
|
|
|
10.5
|
|
|
10-K (001-36250)
|
|
10.5
|
|
12/21/2018
|
|
|
|
10.6
|
|
|
8-K (000-21969)
|
|
10.1
|
|
3/27/2008
|
|
|
|
10.7
|
|
|
8-K (000-21969)
|
|
10.1
|
|
4/15/2010
|
|
|
|
10.8
|
|
|
8-K (000-21969)
|
|
10.1
|
|
3/23/2012
|
|
|
|
10.9
|
|
|
10-Q (001-36250)
|
|
10.1
|
|
6/11/2014
|
|
|
|
10.10
|
|
|
10-Q (001-36250)
|
|
10.2
|
|
6/8/2016
|
|
|
|
10.11
|
|
|
10-K (000-21969)
|
|
10.18
|
|
12/22/2011
|
|
|
|
10.12
|
|
|
10-Q (000-21969)
|
|
10.3
|
|
6/4/2009
|
|
|
|
10.13
|
|
|
10-Q (001-36250)
|
|
10.1
|
|
6/7/2017
|
|
|
|
10.14
|
|
|
10-Q (001-36250)
|
|
10.2
|
|
6/7/2017
|
|
|
|
10.15
|
|
|
S-1 (333-187732)
|
|
10.2.1
|
|
4/4/2013
|
|
|
|
10.16
|
|
|
S-1 (333-187732)
|
|
10.3.1
|
|
4/4/2013
|
|
|
|
10.17
|
|
|
10-K (000-21969)
|
|
10.37
|
|
12/11/2003
|
|
|
|
10.18
|
|
|
8-K (000-21969)
|
|
10.5
|
|
11/4/2005
|
|
|
|
10.19
|
|
|
S-8 (333-214594)
|
|
10.1
|
|
11/14/2016
|
|
|
|
10.20
|
|
|
10-K (000-21969)
|
|
10.26
|
|
12/22/2011
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
|
|
|
|
Form and
|
|
|
|
|
|
Filed
|
Exhibit
|
|
|
|
Registration or
|
|
|
|
|
|
Here-
|
Number
|
|
Exhibit Description
|
|
Commission No.
|
|
Exhibit
|
|
Filing Date
|
|
with (X)
|
10.21
|
|
|
10-Q (000-21969)
|
|
10.1
|
|
6/9/2011
|
|
|
|
10.22
|
|
|
10-Q (000-21969)
|
|
10.1
|
|
3/3/2006
|
|
|
|
10.23
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
10.24
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
10.25
|
|
|
10-K (001-36250)
|
|
10.36
|
|
12/19/2014
|
|
|
|
10.26
|
|
|
8-K (001-36250)
|
|
10.3
|
|
6/3/2015
|
|
|
|
10.27
|
|
|
8-K (001-36250)
|
|
10.4
|
|
6/3/2015
|
|
|
|
10.28
|
|
|
10-K (000-21969)
|
|
10.34
|
|
12/22/2011
|
|
|
|
10.29
|
|
|
8-K (001-36250)
|
|
10.1
|
|
10/31/2019
|
|
|
|
10.30
|
|
|
8-K (001-36250)
|
|
10.2
|
|
10/31/2019
|
|
|
|
10.31
|
|
|
8-K (001-36250)
|
|
10.3
|
|
10/31/2019
|
|
|
|
10.32
|
|
|
8-K (001-36250)
|
|
10.4
|
|
10/31/2019
|
|
|
|
10.33
|
|
|
8-K (001-36250)
|
|
10.5
|
|
10/31/2019
|
|
|
|
10.34
|
|
|
8-K (001-36250)
|
|
10.6
|
|
10/31/2019
|
|
|
|
10.35
|
|
|
8-K (001-36250)
|
|
10.7
|
|
10/31/2019
|
|
|
|
10.36
|
|
|
10-Q (001-36250)
|
|
10.5
|
|
9/9/2014
|
|
|
|
10.37
|
|
|
8-K (001-36250)
|
|
10.1
|
|
6/3/2015
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
|
|
|
|
Form and
|
|
|
|
|
|
Filed
|
Exhibit
|
|
|
|
Registration or
|
|
|
|
|
|
Here-
|
Number
|
|
Exhibit Description
|
|
Commission No.
|
|
Exhibit
|
|
Filing Date
|
|
with (X)
|
10.38
|
|
|
10-Q (001-36250)
|
|
10.1
|
|
9/9/2015
|
|
|
|
10.39
|
|
|
10-Q (001-36250)
|
|
10.3
|
|
9/7/2017
|
|
|
|
10.40
|
|
|
10-Q (001-36250)
|
|
10.1
|
|
6/8/2016
|
|
|
|
10.41
|
|
|
10-Q
(001-36250)
|
|
10.1
|
|
3/8/2017
|
|
|
|
10.42
|
|
|
8-K (001-36520)
|
|
10.1
|
|
10/1/2018
|
|
|
|
10.43
|
|
|
10-Q (001-36250)
|
|
10.6
|
|
9/9/2014
|
|
|
|
10.44
|
|
|
10-Q (001-36250)
|
|
10.7
|
|
9/9/2014
|
|
|
|
10.45
|
|
|
10-K (001-36250)
|
|
10.56
|
|
12/21/2018
|
|
|
|
10.46
|
|
|
10-Q (001-36250)
|
|
10.8
|
|
9/9/2014
|
|
|
|
10.47
|
|
|
10-Q (001-36250)
|
|
10.3
|
|
6/12/2019
|
|
|
|
10.48
|
|
|
10-Q (001-36250)
|
|
10.4
|
|
6/12/2019
|
|
|
|
10.49
|
|
|
10-Q (000-21969)
|
|
10.3
|
|
6/10/2010
|
|
|
|
21.1
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
23.1
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
31.1
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
|
|
|
|
Form and
|
|
|
|
|
|
Filed
|
Exhibit
|
|
|
|
Registration or
|
|
|
|
|
|
Here-
|
Number
|
|
Exhibit Description
|
|
Commission No.
|
|
Exhibit
|
|
Filing Date
|
|
with (X)
|
31.2
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
32.1
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
32.2
|
|
|
—
|
|
—
|
|
—
|
|
X
|
|
101.INS
|
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
—
|
|
—
|
|
—
|
|
X
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
—
|
|
—
|
|
—
|
|
X
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
—
|
|
—
|
|
—
|
|
X
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
—
|
|
—
|
|
—
|
|
X
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
—
|
|
—
|
|
—
|
|
X
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
—
|
|
—
|
|
—
|
|
X
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
—
|
|
—
|
|
—
|
|
X
|
*
|
|
Represents management contract or compensatory plan or arrangement
|
++
|
|
Representations and warranties included in these agreements, as amended, were made by the parties to one another in connection with a negotiated transaction. These representations and warranties were made as of specific dates, only for purposes of these agreements and for the benefit of the parties thereto. These representations and warranties were subject to important exceptions and limitations agreed upon by the parties, including being qualified by confidential disclosures, made for the purposes of allocating contractual risk between the parties rather than establishing these matters as facts. These agreements are filed with this report only to provide investors with information regarding its terms and conditions, and not to provide any other factual information regarding Ciena or any other party thereto. Accordingly, investors should not rely on the representations and warranties contained in these agreements or any description thereof as characterizations of the actual state of facts or condition of any party, its subsidiaries or affiliates. The information in these agreements should be considered together with Ciena’s public reports filed with the SEC.
|
#
|
|
Certain portions of this document have been omitted based on a request for confidential treatment submitted to the SEC. The non-public information that has been omitted from this document has been separately filed with the SEC. Each redacted portion of this document is indicated by a “[*]” and is subject to the request for confidential treatment submitted to the SEC. The redacted information is confidential information of Ciena.
|
(a)
|
the Term shall be automatically extended without any further action if the Company is in active negotiations for, or has entered into, a definitive agreement regarding a Change in Control (a “Pending Transaction”), until the earliest to occur of (i) the date on which such negotiations have terminated without entry into a definitive agreement, (ii) the date on which such definitive agreement has terminated pursuant to its terms without occurrence of a Change in Control, or (iii) 12 months following the Effective Date of such Pending Transaction;
|
(b)
|
in the event that a Change in Control occurs during the Term, this Agreement shall continue in effect for a period of 12 months following the Effective Date; and
|
(c)
|
if the Executive becomes entitled to severance benefits under Section 3 during the Term, this Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.
|
(a)
|
upon the Effective Date, (i) the Executive’s Options that are subject to performance-based vesting and for which the applicable performance period has not yet expired shall immediately be converted into Options with time-based vesting conditions, and (ii) the Executive’s Performance-Based Restricted Stock for which the applicable performance period has not yet expired shall immediately be converted into Time-Based Restricted Stock; in each case, the applicable equity award (x) shall be converted into an amount of shares based on an assumed achievement of 100% of the targeted performance goal(s) for such award, and (y) shall be deemed to have commenced vesting on the date of grant and shall vest over the shorter of (A) four years, with 1/16th of the award vesting on each March 20, June 20, September 20 and December 20 following the date of grant, or (B) the period between the date of grant and the original final vesting date of the applicable equity award, with the award vesting proportionately over such period on each March 20, June 20, September 20 and December 20 following the date of grant;
|
(b)
|
upon a Triggering Event, all of the Executive’s Options, Performance-Based Restricted Stock and Time-Based Restricted Stock (including any Performance-Based Restricted Stock converted pursuant to Section 3.3(a) above), to the extent unvested, shall become immediately vested and exercisable in full; and
|
(c)
|
upon a Triggering Event, the Executive must elect to exercise any unexercised and exercisable Options within the time period set forth in the applicable plan, program or arrangement under which they were granted, subject to the following requirements:
|
(i)
|
If the exercise of any Option within the time period described in this Section 3.3 is prevented by the requirements of federal or state securities laws or as provided under the terms of the applicable plan, program or arrangement, then the Option shall remain exercisable until three months after the date the Executive is notified by the Company that the Option is exercisable, but in no event later than ten years after the date of grant of the Option; and
|
(ii)
|
If the exercise of any Option within this time period would subject the Executive to suit under Section 16(b) of the Securities Exchange Act of 1934, the period for exercise shall be extended until the earliest to occur of (a) the tenth day following the date on which the Executive would no longer be subject to such suit, (b) the 190th day after the end of the salary continuation period, or (c) ten years after the date of grant of the Option.
|
(a)
|
be employed or engaged by or associated with, or engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, any business or other commercial activity whose products directly compete, in whole or in part, with the products of the Company; provided, that the Executive may purchase or otherwise acquire as a passive investment up to (but not more than) one percent of any class of security of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or
|
(b)
|
(i) solicit or induce any employee of the Company to leave the employ of the Company, (ii) solicit business of the same or similar type being carried on by the Company from any person known by to the Executive to have purchased products or services from the Company within the 12 months prior to the Executive’s last day of employment with the Company, (iii) unlawfully interfere with the Company’s relationship with any person, including any person who was an employee, contractor, supplier or customer of the Company, or (iv) disparage the Company or any of its shareholders, directors, officers, employees or agents.
|
(a)
|
paid or distributed in full, or
|
(b)
|
paid or distributed as to such lesser extent which would result in no portion of such Payments being subject to the Excise Tax,
|
(a)
|
shall be the only severance or severance-related payments payable and benefits provided by the Company under any plan, program, policy or agreement, including but not limited to the Company’s U.S. Executive Severance Benefit Plan, and are in full and complete satisfaction of all such liabilities of the Company; and
|
(b)
|
shall be deemed to be inclusive of any notice, payments or benefits to which the Executive may be entitled under the federal Worker Adjustment and Retraining Notification (WARN) Act or other applicable plant or facility closing or mass layoff law, the Employment Standards Act, 2000 or other applicable employment standards legislation, or any other statutory or regulatory requirement to provide notice of employment termination or entitlement to severance payments.
|
|
CIENA CORPORATION
|
EXECUTIVE
|
By:
|
/s/ David M. Rothenstein
|
/s/ Gary B. Smith
|
Name:
|
David M. Rothenstein
|
Gary B. Smith
|
Title:
|
Senior VP and General Counsel
|
|
|
|
Date: November 30, 2019
|
(a)
|
the Term shall be automatically extended without any further action if the Company is in active negotiations for, or has entered into, a definitive agreement regarding a Change in Control (a “Pending Transaction”), until the earliest to occur of (i) the date on which such negotiations have terminated without entry into a definitive agreement, (ii) the date on which such definitive agreement has terminated pursuant to its terms without occurrence of a Change in Control, or (iii) 12 months following the Effective Date of such Pending Transaction;
|
(b)
|
in the event that a Change in Control occurs during the Term, this Agreement shall continue in effect for a period of 12 months following the Effective Date; and
|
(c)
|
if the Executive becomes entitled to severance benefits under Section 3 during the Term, this Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.
|
(a)
|
upon the Effective Date, (i) the Executive’s Options that are subject to performance-based vesting and for which the applicable performance period has not yet expired shall immediately be converted into Options with time-based vesting conditions, and (ii) the Executive’s Performance-Based Restricted Stock for which the applicable performance period has not yet expired shall immediately be converted into Time-Based Restricted Stock; in each case, the applicable equity award (x) shall be converted into an amount of shares based on an assumed achievement of 100% of the targeted performance goal(s) for such award, and (y) shall be deemed to have commenced vesting on the date of grant and shall vest over the shorter of (A) four years, with 1/16th of the award vesting on each March 20, June 20, September 20 and December 20 following the date of grant, or (B) the period between the date of grant and the original final vesting date of the applicable equity award, with the award vesting proportionately over such period on each March 20, June 20, September 20 and December 20 following the date of grant;
|
(b)
|
upon a Triggering Event, all of the Executive’s Options, Performance-Based Restricted Stock and Time-Based Restricted Stock (including any Performance-Based Restricted Stock converted pursuant to Section 3.3(a) above), to the extent unvested, shall become immediately vested and exercisable in full; and
|
(c)
|
upon a Triggering Event, the Executive must elect to exercise any unexercised and exercisable Options within the time period set forth in the applicable plan, program or arrangement under which they were granted, subject to the following requirements:
|
(i)
|
If the exercise of any Option within the time period described in this Section 3.3 is prevented by the requirements of federal or state securities laws or as provided under the terms of the applicable plan, program or arrangement, then the Option shall remain exercisable until three months after the date the Executive is notified by the Company that the Option is exercisable, but in no event later than ten years after the date of grant of the Option; and
|
(ii)
|
If the exercise of any Option within this time period would subject the Executive to suit under Section 16(b) of the Securities Exchange Act of 1934, the period for exercise shall be extended until the earliest to occur of (a) the tenth day following the date on which the Executive would no longer be subject to such suit, (b) the 190th day after the end of the salary continuation period, or (c) ten years after the date of grant of the Option.
|
(a)
|
be employed or engaged by or associated with, or engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, any business or other commercial activity whose products directly compete, in whole or in part, with the products of the Company; provided, that the Executive may purchase or otherwise acquire as a passive investment up to (but not more than) one percent of any class of security of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or
|
(b)
|
(i) solicit or induce any employee of the Company to leave the employ of the Company, (ii) solicit business of the same or similar type being carried on by the Company from any person known by to the Executive to have purchased products or services from the Company within the 12 months prior to the Executive’s last day of employment with the Company, (iii) unlawfully interfere with the Company’s relationship with any person, including any person who was an employee, contractor, supplier or customer of the Company, or (iv) disparage the Company or any of its shareholders, directors, officers, employees or agents.
|
(a)
|
paid or distributed in full, or
|
(b)
|
paid or distributed as to such lesser extent which would result in no portion of such Payments being subject to the Excise Tax,
|
(a)
|
shall be the only severance or severance-related payments payable and benefits provided by the Company under any plan, program, policy or agreement, including but not limited to the Company’s U.S. Executive Severance Benefit Plan, and are in full and complete satisfaction of all such liabilities of the Company; and
|
(b)
|
shall be deemed to be inclusive of any notice, payments or benefits to which the Executive may be entitled under the federal Worker Adjustment and Retraining Notification (WARN) Act or other applicable plant or facility closing or mass layoff law, the Employment Standards Act, 2000 or other applicable employment standards legislation, or any other statutory or regulatory requirement to provide notice of employment termination or entitlement to severance payments.
|
|
CIENA CORPORATION
|
EXECUTIVE
|
By:
|
/s/ David M. Rothenstein
|
___________________________________
|
Name:
|
David M. Rothenstein
|
|
Title:
|
Senior VP and General Counsel
|
|
|
|
Date: November 30, 2019
|
|
/s/ Gary B. Smith
|
|
Gary B. Smith
|
|
President and Chief Executive Officer
|
|
/s/ James E. Moylan Jr.
|
|
James E. Moylan Jr.
|
|
Senior Vice President and Chief Financial Officer
|
/s/ Gary B. Smith
|
Gary B. Smith
|
President and Chief Executive Officer
|
December 20, 2019
|
/s/ James E. Moylan Jr.
|
Senior Vice President and Chief Financial Officer
|
December 20, 2019
|